After more than a decade navigating the highs and lows of Malaysia’s property industry, it is clear that 2026 will mark a pivotal point in the nation’s development journey.

Under Budget 2026, valued at RM419.2 billion, the government is steering the economy toward strategic, targeted growth by blending fiscal discipline with social inclusivity to make homeownership a right rather than a luxury.

Experts note that Budget 2026 is not about austerity but about allocative precision, reallocating capital from consumption to innovation, from dependence to competitiveness.

This approach aims to position Malaysia as ASEAN’s most resilient mid-tier economy by 2027.

The government projects economic growth of between 4.5% and 5.5%, with the fiscal deficit contained at 3.5% of GDP.

Meanwhile, subsidy rationalisation, expected to save RM10–12 billion annually, will redirect funds into productivity-enhancing sectors such as digital infrastructure, renewable energy, logistics modernisation, and housing.

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Key Takeaways: 

• Budget 2026, totalling RM419.2 billion, marks a decisive shift towards strategic, productivity-led growth and affordable homeownership.
• The government targets 4.5–5.5% GDP growth and a 3.5% fiscal deficit, with RM10–12 billion saved annually from subsidy rationalisation redirected into innovation and infrastructure.
• RM672 million is allocated for affordable housing and urban living, including RM900 million for 48 Program Residensi Rakyat (PRR) projects and 14 Rumah Mesra Rakyat schemes benefiting ~17,500 residents.
• RM5.9 billion goes to Digital/AI Nation initiatives, while RM2 billion funds the MADANI Undersea Cable (SALAM) to boost digital connectivity and 5G expansion to 80% coverage by 2026.
• Foreign Direct Investment (FDI) remains strong, led by RM31 billion from China in 2024, driving industrial real estate growth in Johor, Kedah, and Pahang.
• Mega projects like ECRL, RTS Link, MRT3, and Penang LRT are expected to raise surrounding land values by 15–50% and catalyse new growth corridors.
• RM7 billion is allocated for infrastructure in Special Economic Zones (SEZs), with JS-SEZ alone recording RM37.1 billion approved investments in H1 2025.
• Real estate agents must evolve into advisors skilled in tax, sustainability, and digital marketing to remain competitive.

Together, these forces position Malaysia for a year of stable, inclusive growth and a property market driven by practical demand rather than speculation. 

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Shifting Patterns in Malaysia’s Property Market

The property market is now shaped by real demand rather than speculation.

According to a mid-year report by Juwai IQI, average home rents either remained stable or dropped slightly in the first quarter of 2025.

The average rent across Malaysia fell from RM2,052 in Q4 2024 to RM2,020 in Q1 2025.

This marks the first time in over a year that rental prices have not increased, which is welcome news for many Malaysians, especially those living in major cities such as Kuala Lumpur.

Analysts expect this trend to likely continue into 2026, supported by moderating demand and an increase in new housing supply.

Kashif Ansari, Juwai IQI Co-Founder and Group CEO said,

Stable rental prices bring predictability. That’s good not just for tenants, but also for developers and property investors looking to plan long-term.”

Kashif Ansari, Juwai IQI Co-Founder and Group CEO

Additionally, NAPIC data also shows more than 311,000 residential transactions in the first nine months of 2024. A 6.2% increase from the previous year.

Notably, 70% of these involved homes priced below RM500,000, signalling a strong shift towards affordability and practicality.

Buyers are prioritising integrated, sustainable, and connected living in the years to come.

Areas like Sepang, Kajang, Gombak, and Puchong continue to record steady price growth of 4–5% annually, driven by suburban migration and the desire for balanced living environments.

The rise of integrated townships such as Gamuda Gardens and Bandar Bukit Raja exemplifies this shift toward live-work-play ecosystems.

Sustainability also is becoming non-negotiable. Over 150 million square feet of green-certified building space has been recorded nationwide, much of it residential.

Buyers are also drawn to transit-oriented developments (TODs), with property values near LRT, MRT, and KTM stations expected to appreciate 20–30% within 3–5 years once projects like LRT3 (2025), RTS Link (2027), and MRT3 (2027) are fully operational.

Budget 2026: Blueprint for Precision and Productivity

The Ministry of Housing and Local Government (KPKT) allocation for 2026 has increased modestly to RM621 million, yet its impact is multiplied through targeted applications and urban renewal efforts.

Sector / Initiative	Allocation	Notes
Affordable Housing & Urban Living	RM672 million	For Residensi Rakyat and Rumah Mesra Rakyat programmes benefiting ~33,000 residents
Urban Infrastructure Upgrades (hawker centres, PPR lifts)	RM500 million	RM200m for hawker facilities, RM300m for public housing upgrades
Rural Infrastructure / Connectivity	RM3.3 billion	Focus on village roads, clean water, bridges in Sabah & Sarawak
Digital / AI Nation Initiatives	RM5.9 billion (+ tax deduction)	Targeting AI-driven economy by 2030

Additional Housing Allocations

Further strengthening housing accessibility, the government has allocated:

• RM900 million for 48 Program Residensi Rakyat (PRR) projects and 14 Rumah Mesra Rakyat projects, benefiting approximately 17,500 residents.
• RM200 million for affordable housing on wakaf land under UDA Holdings, a move that integrates social welfare with real estate development.
• A PNB–PHB strategic partnership to enhance affordable housing, student accommodation, and commercial projects.

These efforts underscore the government’s commitment to liveability and inclusivity — building homes that serve long-term community needs.

Mega Infrastructure Projects Reshaping Malaysia

As for infrastructure, Malaysia continues to lay the groundwork for nationwide property growth.

East Coast Rail Link (ECRL): The 665km project connecting the East Coast to the Klang Valley will cut travel time between Kota Bharu and Gombak to four hours, halving the current duration. Land near ECRL stations in Bentong, Kuantan, Kemaman, and Kota Bharu is expected to appreciate 30–50% within five years after operations begin.

Johor–Singapore Rapid Transit System (RTS) Link: Set for completion in 2027, the RTS will connect Bukit Chagar (Johor Bahru) and Woodlands North (Singapore) with a 10,000-passenger-per-hour capacity. Johor Bahru is expected to transform into a key commuter hub, with property prices projected to rise 20–35% near Bukit Chagar by 2027.

Johor–Singapore Special Economic Zone (JS-SEZ): Covering 3,571 sq km, this zone recorded RM37.1 billion in approved investments in H1 2025. The synergy between JS-SEZ and RTS Link is expected to drive housing and industrial growth across Iskandar Puteri, Nusajaya, and Medini.

MRT3 (Circle Line): The 51km loop with 31 stations will interlink MRT1, MRT2, LRT, and Monorail systems, creating a “super network” for Klang Valley. Properties within 800 metres of MRT3 stations could see 15–25% price growth.

Penang Light Rail Transit (LRT): The RM5 billion, 29.5km line linking Georgetown to Butterworth will alleviate congestion and unlock new development areas. Land values along the route are expected to rise 25–40%, with Gamuda-led consortia awarded an RM8 billion contract. Completion is targeted by 2030.

These projects collectively represent billions in investment. This is a structural catalyst for property appreciation, economic diversification, and regional equity.

However, Kashif Ansari, Co-Founder and Group CEO of Juwai IQI, stressed that Johor is set to complement, not compete with, the Klang Valley, creating a dynamic and balanced economic future for Malaysia. 

Industrial and Digital Transformation

As for Foreign Direct Investment (FDI), particularly from China, has contributed RM31 billion in 2024 which will continue to anchor Malaysia’s industrial expansion in metals, energy, and technology manufacturing.

According to Ansari, major countries such as China, the United States, and Singapore will continue to invest in Malaysia to support economic growth and development.

It’s not just China that is pumping ringgit into Malaysia. Singapore outdoes China in having accumulated the largest total investment stock in Malaysia, although its 2024 flows to Malaysia were smaller. The United States is the other top three source of inbound investment.” 

Kashif Ansari, Juwai IQI Co-Founder and Group CEO

As aware, industrial diversification is reducing reliance on oil and gas, creating jobs and supporting logistics and residential demand, especially in Johor, Kedah, and Pahang.

At the same time, RM2 billion has been allocated for the MADANI Undersea Cable (SALAM) spanning 3,190 km across Peninsular Malaysia, Sabah, and Sarawak.

Coupled with 5G network expansion targeting 80% coverage by 2026, these initiatives enable smart building technologies and the growth of AI-integrated urban ecosystems.

Incentives and Fiscal Measures for Homebuyers and Investors

For First-Time Buyers

• RM10 billion under the Skim Jaminan Kredit Perumahan (SJKP), benefiting over 20,000 Malaysians with government-backed loans up to RM500,000.
• Tax relief up to RM7,000 on housing loan interest (valid between 1 January 2025 – 31 December 2027).
• Property purchase relief up to RM5,000 for homes priced RM500,000–RM750,000.
• Stamp duty exemption extended to December 2027 for homes priced up to RM500,000.

Collectively, these measures can reduce initial homeownership costs by 15–20%, providing meaningful support for young families and first-time buyers.

For Investors

Key opportunities arise in:

• Special Economic Zones (SEZs): RM7 billion allocation for infrastructure across three SEZs.
• Urban Regeneration Programme: 10% tax deduction (up to RM10 million) for landlords converting old commercial buildings into residential use.
• Industrial & Logistics Growth: Sustained demand supported by SEZ incentives.
• Carbon Tax: Encourages ESG-aligned assets, rewarding energy-efficient properties.

However, challenges continues to persist. SST expansion to 8% affects commercial leasing, and competition from large-scale government housing programmes could reshape private market dynamics.

The Evolving Role of Property Agents

The good news is, the profession is undergoing structural change.

With greater fiscal and regulatory complexity, agents must evolve into trusted advisors who can interpret incentives, evaluate tax impacts, and guide buyers through government-backed financing schemes.

Success will depend on continuous education, digital mastery, and specialisation in niche markets such as ESG properties, co-living spaces, industrial real estate, and foreign buyer advisory.

Agents who embrace digital marketing, financial literacy, and sustainability insights will lead the next era of growth.

Buyer Trends and Market Behaviour

For buyer trends and market behaviour, affordability without compromise remains the central theme.

Malaysians increasingly demand quality, convenience, and sustainability but within reachable price brackets.

Surprisingly, newly data shows younger Malaysians are leaning more toward high-rise buildings such as apartments and condominiums, rather than landed homes.

Demographic Overview

Segment	Budget	Preference	Key Priorities
First-Time Buyers (25–35 yrs)	RM300k–RM500k	Condos near transit or integrated townships	Affordability, accessibility, lifestyle
Young Families (30–45 yrs)	RM500k–RM800k	Landed homes in townships	Space, schools, community safety
Upgraders (40–55 yrs)	RM800k–RM1.5m	Larger landed or luxury condos	Exclusivity, long-term value
Retirees (55+)	RM500k–RM1m	Low-maintenance condos or quiet landed homes	Accessibility, healthcare, safety

Based on the table, 70% of transactions in 2024 were for homes priced below RM500,000, underlining the growing weight of the affordable segment.

Gen Z, who are nearly nine million strong, will drive demand in the housing market for the next 20 years as they upgrade to larger units or landed homes.”

Kashif Ansari, co-founder and group CEO of Juwai IQI

Buyers also favour homes with hybrid workspace flexibility, green certification, enhanced security, and proximity to transit, retail, and healthcare.

Building Malaysia’s Next Chapter

Overall, Malaysia’s property sector in 2026 is predicted to be grounded in precision policy, targeted investment, and sustainable vision.

Budget 2026 embodies a pragmatic commitment to fiscal discipline and inclusive growth with affordable housing, digital transformation, and industrial expansion forming its backbone.

As Shan Saeed summarised, “Budget 2026 is about precision investing in innovation and competitiveness.”

The coming years will define Malaysia’s next economic chapter not through speculation, but through structure, foresight, and resilience.

For investors, developers, agents, and homebuyers alike, 2026 represents steady opportunity built on fundamentals, connectivity, and confidence.