Written by Muhazrol Muhamad, GVP, Head of Bumiputra Segment

In July 2025, Bank Negara Malaysia (BNM) significantly reduced the Overnight Policy Rate (OPR) from 3.00% to 2.75%, a move anticipated to profoundly impact Malaysia’s property market. This OPR cut has led to lower base rates from banks, directly translating into cheaper monthly loan installments for homeowners, potentially saving RM70-RM75 per month on a typical RM500,000 home loan. This reduction significantly boosts housing affordability, particularly for the M40 segment and first-time homebuyers, offering a prime opportunity to secure more favorable financing terms for new launches under RM500,000, which currently constitute a substantial portion of new supply. 

While Q1 2025 saw a dip in transactions, the OPR cut is expected to renew interest from buyers, providing developers with a much-needed boost in take-up rates. Existing homeowners also stand to benefit from lower rates, with increased potential for refinancing to reduce costs or shorten loan tenures amidst rising competition among banks. However, this optimism is tempered by the fact that the OPR cut was a response to weaker global growth forecasts, and domestic factors like SST expansion and rising living costs may still cause some Malaysians to delay major purchases. Furthermore, investors should remain cautious due to oversupply in certain high-rise segments, particularly in Klang Valley, which could lead to uneven property appreciation. Ultimately, this OPR cut is seen as a turning point, making Malaysia’s real estate market more affordable, competitive, and potentially more exciting for buyers, sellers, and developers alike.