Real estate sector must serve wider economy, says Liew

May 12, 2026

by AKMAR ANNUAR
MALAYSIA’S real estate sector must move beyond profit-led development and help address wider national challenges, including housing affordability, urban sprawl, car dependency and talent retention.
Deputy Finance Minister Liew Chin Tong said the sector should see itself as part of the country’s economic and nation-building agenda, rather than an industry measured mainly by land values, sales and financial returns.

“The real estate sector should not see itself as the centre of the universe. Instead, it should see itself as fulfilling broader public purposes within the economy and nation-building process,” he told reporters after officiating the 13th International Real Estate Research Symposium (IRERS) 2026 in Kuala Lumpur today.
Liew said Malaysia’s housing model had been shaped by decades of outward urban expansion, which pushed many households further from city centres and made private vehicles a daily necessity.
He said the model is becoming harder to sustain as global energy, supply chain and geopolitical shifts expose the risks of building cities around the assumption that fuel, land and mobility will remain cheap.
“Even if wars were to end tomorrow, the effects will linger much longer than we anticipate. Therefore, we need to address the national vulnerabilities that we face,” he added.
Liew said one of the responses should be to increase housing supply within inner cities through ownership, rental and hybrid models, allowing more Malaysians to live closer to work and depend less on cars.
He said Kuala Lumpur and other urban centres have become hollowed out over time, with workers entering the city during the day and leaving in the evening.
That pattern, he said, has limited the development of more active 24-hour cities and deepened Malaysia’s dependence on long commutes.
“What I have mentioned will not happen overnight because what we are seeing today is the result of 50 years of the way we have approached housing development and urban expansion. It may take 10 to 15 years to reverse this trend,” he said.
Liew said Malaysia must create cities where people can rely more on public transport, live nearer to employment centres and spend less time travelling from distant suburbs.
He said the country still benefits from domestic oil resources and fuel subsidies, but that should not justify continuing an urban model built around private car ownership.
“We will have to nationally think of how to ensure that less and less people are dependent on private cars, and to reverse this 50-year trend, we will have to create more housing in the city for the most number of people,” he said.
Liew said the affordability challenge should not be framed only as an issue affecting the poor, as young people and middle-class households are also struggling to live near major employment centres.
He added that young Malaysians in their 30s should not be forced into long-distance commuting from places such as Seremban while effectively working in Kuala Lumpur.
He said vacant office buildings in Kuala Lumpur could be converted into housing, drawing from similar efforts seen in Europe and the US.
“We are not only talking about housing for the poor. We are talking about housing for young people and the middle class,” he said.
Liew said such conversions could help repopulate inner cities, lower commuting costs and ease the pressure on younger households already burdened by housing and transport expenses.
He said the real estate sector must also support Malaysia’s strategic industries instead of focusing narrowly on property transactions.
Citing Penang, Liew said developers should look beyond building homes for foreign buyers and consider how housing can strengthen the semiconductor ecosystem.
He said the industry needs engineers, but wage differences with Singapore make it difficult for Malaysia to retain young talent.
“One way is to increase housing stock so that young engineers can live decently, whether through ownership, rental or company-provided housing,” he added.
Liew said housing should be treated as part of the country’s industrial strategy, particularly in areas where Malaysia is trying to anchor high-value sectors.
“Housing can help retain more Malaysians, especially young Malaysian engineers, to continue working in Malaysia’s semiconductor industry,” he said.
He said this reflects the broader role real estate can play when housing is treated as economic infrastructure that supports jobs, families and productive industries.
Liew also said future developments must also take climate realities into account, as cities can no longer expand endlessly without considering land use, mobility, emissions and liveability.
He added that Malaysia needs denser cities, but they must be planned so that more people can live near work, public transport and essential services without sacrificing quality of life.
Climate change, he said, will increasingly shape where people live, how cities are built and how urban areas protect shorelines, infrastructure and neighbourhoods.
When asked about inequality in housing policy, Liew said poor access to decent homes could deepen social divisions and leave lasting effects on affected households.
“A fairer housing system would help reduce wider inequality and strengthen social cohesion, particularly in Malaysia and Southeast Asia,” he told The Malaysian Reserve (TMR).
He said housing policy must also avoid worsening household indebtedness, as home ownership that relies too heavily on borrowing could create another layer of vulnerability for families.
Liew said real estate players, valuers, researchers and policymakers must remain alert to the risk of property bubbles, particularly when markets are driven by the belief that prices will continue to rise.
He said such assumptions have led to painful corrections elsewhere, including Japan’s property bubble in 1990 and 1991, the 2008 Global Financial Crisis that began with the subprime mortgage crisis, and the 1997 Asian Financial Crisis.
“Therefore, we must be very careful in managing the sector,” he added.
Liew said the real estate fraternity, including valuers and academics, has a responsibility to support stable and sustainable development by spotting, stopping and preventing bubbles before they form.
He said the global economy is undergoing a structural shift that requires governments, industries and investors to reassess old assumptions about finance, land, housing, energy, manufacturing and technology.
He said the financialisation of real estate over the past five decades had contributed to affordability pressures, speculation and repeated crises that hurt ordinary households.
Liew said Malaysia should use the current period of global uncertainty to reshape its housing and urban development model.
He said the industry must innovate with ideas that build better cities, support productive sectors and ensure housing serves people rather than speculation.