PROPERTY prices in 2026 are expected to rise moderately by about 2.5% to 5%, with gains likely to be selective and concentrated along key infrastructure corridors as the market recovery matures and turns more cautious.
Economist Prof Emeritus Dr Barjoyai Bardai said the outlook reflects a market that is no longer rebounding broadly, but expanding in pockets depending on location, project quality and real value to buyers.
“The 2026 property market is expected to be in a ‘selective recovery’, meaning activity will increase but buyers will be more cautious and selective about location, quality and value.
“Analysts say the market will favour well-located projects that are moderately priced and well-managed, while ageing assets or those with weaker connectivity are expected to struggle,” he told Utusan Malaysia.
He said National Property Information Centre (NAPIC) data in 2025 showed local buyers remained the main driver of transactions, with a clear tilt towards homes priced below RM500,000.
“In the first quarter of 2025, more than 65% of new launches were within that price range, reflecting a supply of homes that is more aligned with the market’s real affordability.
“In that context, the affordable and mid-priced housing segment, especially within the RM300,000 to RM600,000 range, is expected to emerge as the main driver of transaction volumes in 2026.
“Search and enquiry trends on digital property platforms also showed a significant increase for units priced below RM300,000 throughout 2025, supported by the government’s pro-homeownership fiscal policies,” he added.
On the macro backdrop, Barjoyai said monetary policy stability should continue to support the market, with analysts largely expecting the overnight policy rate (OPR) to hold at around 2.75% throughout 2026.
That, he said, would help keep loan repayments manageable and support financing approvals, especially for first-time buyers.
Meanwhile, Putra Business School (PBS) MBA programme director Prof Dr Ahmed Razman Abdul Latiff said the property sector is still expected to expand in 2026, but at a slower pace.
He linked this to weaker domestic demand amid rising average house prices, as well as tighter access to housing loans due to poor credit records.
“Although the OPR is relatively low, rising house prices mean that most people looking to buy their first home will think twice before doing so.
“New homes will continue to be bought by foreigners who can afford higher prices, and will also be bought by speculator groups,” he said.
He said prices could rise in major urban locations such as Kuala Lumpur, Pulau Pinang, Johor Bahru and Selangor, but not necessarily on the back of local buyers.
“There will be more rural housing projects that will be bought by local residents, which means traffic congestion issues will continue because people are forced to commute to work in cities over longer distances.
“The solution is for the government to impose higher taxes on undeveloped vacant land around cities, and the quota for homes built priced below RM300,000 should be increased.
“In addition, alternative home financing should be strengthened, no longer solely through bank loans, but through a ‘rent to own’ system or musharakah mutanaqisah managed by cooperatives, or possibly by PR1MA Corporation Malaysia (PR1MA) and Syarikat Perumahan Negara Berhad (SPNB),” he added.
Ahmed Razman also said the minimum house price threshold for foreign buyers should be raised to at least RM2 million in every state.
Source: The Malaysia Reserve
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