Malaysia’s new housing projects decline, unsold homes increase

[KUALA LUMPUR] Malaysia saw a sharp drop in new residential housing projects in the first half of this year, while the number of unsold residential units increased, underscoring weakness in the real estate market.

Projects encompassing 23,380 residential units were launched in the first six months of 2025, down 46 per cent from a year earlier, according to Ministry of Finance data released on Thursday (Sep 4).

Some 26,911 residential units that were completed remain unsold, a 19 per cent increase from a year earlier. That means roughly one of every five homes that were completed till Jun 30 inclusive, including everything from single-storey homes to condominiums, had not been sold, according to government data.

Authorities expect the residential property market to gradually recover, supported by lower borrowing costs after the central bank cut its benchmark interest rate in July. Meanwhile, the overhang of commercial properties, shops and serviced apartments completed in H1 2025 fell from a year earlier.

“The country’s real estate sector is expected to continue its recovery momentum,” Second Finance Minister Amir Hamzah said in a speech on Thursday, nothing that the lowering of the policy rate in July was expected to increase the financial capacity of buyers and stimulate demand for the property market, especially in the residential segment.

Bank Negara Malaysia kept its interest rate unchanged on Thursday, as the central bank weighs the effects of a recent easing and growth risks posed by US tariffs. BLOOMBERG