Malaysia’s property sector is expected to enter a stronger, more market-driven growth phase in 2026, supported by improving economic fundamentals, resilient domestic demand and timely infrastructure delivery. According to a report in Business Times, industry players see a noticeable “step-up” in activity next year, even as concerns over supply overhang persist in certain segments.

Datuk Paul Khong, group managing director of Savills Malaysia Group, said the market will continue to reward assets that are aligned with future needs, particularly those offering long-term value, functional design and adaptability. While residential and high-rise property overhang rose in the third quarter of 2025, he noted that the increase largely reflects aggressive launches over the past three years following a delayed recovery since 2022.

Savills Malaysia is not overly concerned about the recent uptick, as it coincides with sustained labour market expansion and income growth. The first interest rate cut in five years by Bank Negara Malaysia in July 2025, which lowered the policy rate by 25 basis points to 2.75 per cent, is also expected to lift market sentiment. This is further supported by government measures to ease cost-of-living pressures.

Malaysia’s employment market remains a key pillar of demand. Labour participation reached a record 70.9 per cent in September 2025, while unemployment fell to a 10-year low of three per cent, underscoring resilient domestic consumption. Khong said favourable demographics and political stability continue to provide a solid foundation for real estate growth, alongside strong investment activity.

From a macro perspective, economists are cautiously optimistic. Quah He Wei of AllianceDBS Research Sdn Bhd expects a gradual recovery to continue, citing healthy supply-demand dynamics, lower interest rates and steady labour force growth. Despite affordability challenges, Malaysia’s property sector recorded quarter-on-quarter growth of 10 per cent in the third quarter of 2025, supported by stronger-than-expected GDP growth of 5.2 per cent year-on-year. Commercial and industrial properties were standout performers as approved investments from previous years moved into the implementation phase.

Policy support is also expected to underpin demand in 2026. Measures announced in Budget 2026 include a doubling of financing guarantees for first-time homebuyers to RM20 billion, extended stamp duty exemptions for homes below RM500,000, and higher cash assistance under social support programmes. Together with a seven per cent salary increase for civil servants, these initiatives are expected to help sustain housing demand.

Infrastructure delivery will be another major catalyst. Key projects scheduled for completion or commencement in 2026 include the LRT Shah Alam Line, the Johor Bahru–Singapore RTS Link, the East Coast Rail Link connection to Gombak, and the Penang LRT Mutiara Line. These projects are expected to reinforce urban development and improve connectivity across major growth corridors.

On the industrial front, logistics and data centres are powering expansion, driven by rapid artificial intelligence adoption and rising digital infrastructure needs. Johor, Klang Valley and Penang continue to attract strong interest, with Johor emerging as a regional data centre hub. Managed industrial parks and premium sites with robust power and water infrastructure are expected to see firm demand and higher capital values.

Meanwhile, Kuala Lumpur’s Grade A office market remains resilient, favouring quality buildings with strong sustainability credentials and transit connectivity. Retail is evolving towards community-centric and experiential formats, while hospitality players are pivoting towards sustainability ahead of Visit Malaysia Year 2026, supported by new ESG initiatives led by the Malaysian Association of Hotels.

Sunway Bhd has acquired a freehold land parcel in George Town, Penang, as part of a broader RM179.8 million investment to replenish its development landbank and strengthen its future project pipeline.

In a statement, Sunway Bhd said the Penang acquisition involves a 0.42-hectare freehold site along Jalan Pangkor, purchased for RM61.45 million through its unit Sunway Bintang Sdn Bhd. The site is located about 500 metres from Gurney Bay and is intended for a mixed-use development comprising serviced apartments and retail components. The project is estimated to have a gross development value (GDV) of approximately RM274 million.

Sunway Property managing director Chung Soo Kiong said the move reflects the group’s confidence in Penang’s continued growth as a regional hub for investment and tourism, while strengthening Sunway’s presence in established urban areas.

Beyond Penang, the group also completed two acquisitions in Selangor. In Puchong, Sunway, via Sunway Kiara Sdn Bhd, entered into a sale and purchase agreement with Glomac Al-Batha Sdn Bhd to acquire a 2.74-hectare leasehold parcel for RM97.3 million. The land, which has direct access to the Damansara–Puchong Expressway and Shah Alam Expressway, is earmarked for a mixed-use development comprising serviced apartments and neighbourhood retail, with an estimated GDV of RM770 million.

Separately, Sunway, through its wholly owned unit Rich Worldclass Sdn Bhd, acquired a 0.45-hectare freehold parcel in USJ 1 for RM21 million. The site adjoins Sunway’s existing landholding in the area, enabling the consolidation of about 1.26 hectares near the USJ 1 Bus Rapid Transit station for a potential transit-oriented development.

The group said all projects will be guided by its design and development framework, incorporating sustainability, innovation, health and wellness, and long-term community considerations, in collaboration with local authorities and stakeholders.

Taman Desa Sinaran is a small landed residential housing scheme by Sunrise Accord Sdn. Bhd. in Sungai Dua, Butterworth. The site is located near the junction of Jalan Sungai Dua and Jalan Sungai Dua Utama 1, within short driving distance of the North–South Expressway and Butterworth Outer Ring Road. The Sungai Dua toll plaza is located less than 3km from the project site.

The development consists of 12 units of two-storey semi-detached houses and 19 units of two-storey terrace houses. Both housing types provide 4 bedrooms and 3 bathrooms. The semi-detached houses have typical built-up dimensions of approximately 25’ × 32’ to 37’, while the terrace houses have typical built-up dimensions of about 19’ × 35’ to 40’. Indicative prices start from RM728,000 for the semi-detached units and RM530,000 for the terrace units.

Project Name : Taman Desa Sinaran
Location : Sungai Dua, Butterworth
Property Type : Residential
Tenure: Freehold
Land Area: (to be confirmed)
Built-up Size: 19′ x 35′ onwards (terrace), 25′ x 32′ onwards (semi-d)
Total Units : 31
Indicative Price : RM530,000 onwards
Developer :  Sunrise Accord Sdn. Bhd.

The Penang government is coordinating the relocation of businesses affected by preparatory works for the Penang Light Rail Transit Mutiara Line, particularly hawkers and roadside traders located along the project alignment, ahead of the main construction phase scheduled to begin in January 2026.

The Mutiara Line, which is expected to be completed by December 2031, will span 29.5 kilometres and include 21 stations, forming a key public transport link between Penang Island and the mainland. The alignment will run from the Penang South Reclamation area to Penang Sentral and Komtar, with train services operating in rotation along the route.

Chief Minister Chow Kon Yeow said the relocation exercise is being carried out in stages due to the length of the alignment, which exceeds 20 kilometres. Contractors will proceed with construction in areas where relocation has been completed, while work in other locations will only begin once the process is finalised.

He noted that most affected parties understand the necessity of relocation for a public infrastructure project and have been generally cooperative, provided suitable alternative sites are made available. According to Chow, businesses that agree to relocate will also be issued the necessary licences at their new locations.

Penang will begin enforcing community service orders for littering and other minor offences from July 1, following a six-month preparation period focused on public education, administrative coordination and enforcement readiness.

State Local Government, Town and Country Planning Committee chairman Jason H’ng Mooi Lye said the state would enforce the Street, Drainage and Building (Amendment) Act 2025, known as Act A1773, instead of the Solid Waste and Public Cleansing Management Act (Act 672), which came into effect nationwide on Jan 1. Penang has yet to adopt Act 672.

Under Act A1773, courts are empowered to impose community service orders of up to 12 hours, to be completed within six months of conviction, for minor offences. Such work may include collecting rubbish, cleaning public spaces, cutting grass or clearing cobwebs.

H’ng said the approach aims to strengthen public cleanliness and instil greater civic responsibility, rather than relying solely on fines as a deterrent. He stressed that no enforcement action would be taken during the six-month preparation period.

“Although the federal law has been enforced since Jan 1, Penang is giving time for preparation, education and the establishment of proper enforcement mechanisms,” he told reporters.

H’ng said enforcement in Penang would only begin once the Penang Island City Council (MBPP) and the Seberang Perai City Council (MBSP) finalise standard operating procedures, including summons issuance and supervision of community service orders.

At the federal level, Housing and Local Government Minister Nga Kor Ming said the stricter anti-littering measures apply to everyone, including foreigners and children. He was reported as saying that no one is exempt from the law, and anyone caught littering, spitting or discarding cigarette butts will face action. Parents or guardians, he added, will be held fully responsible for offences committed by children and will be required to settle the compound fines.