Article
Property Sector Looks Beyond Budget 2027 to Tackle Costs, Overhang and Stalled Projects
Budget 2027 contained several measures for homebuyers, but the property industry says deeper problems need attention. A report by The Star on 19 October 2026 looked at what the sector wants beyond the budget, including action on construction costs, housing overhang, abandoned projects and mid-market supply.
What Budget 2027 offers buyers
Based on reporting around the budget, measures for homebuyers include expanded stamp duty relief and RM20 billion in housing guarantees. These help with upfront costs and access to financing, particularly for first-time buyers and those without strong credit histories.
However, as The Star noted, such measures do not reduce house prices or monthly repayments. For many buyers, the main barrier remains affordability compared with income.
What developers want
According to the report, developers are calling for:
- Lower compliance and infrastructure costs
- Faster approvals for projects
- Stronger rescue mechanisms for stalled and abandoned projects
- Targeted measures for unsold serviced apartments
Rising construction costs are a major concern. When material, labour and compliance costs rise, developers either raise prices, reduce sizes or delay launches. A survey reported by The Edge found that many Real Estate and Housing Developers' Association (Rehda) members were holding off on residential launches in the second half of 2026.
Key takeaway: budget relief helps buyers at the door, but long-term affordability depends on costs, supply in the right segments and fixing stalled projects.
The overhang problem
Unsold completed homes remain a challenge. Official data for the first half of 2026 showed unsold completed homes rose 8.6% to 33,094 units, led by Johor, Selangor and Perak, according to reports. Many of these are in segments or locations that do not match buyer demand, such as high-priced units or serviced apartments in oversupplied areas.
Meanwhile, the property loan market shows mixed signals. We covered recent loan data in our report on property loans and cooling demand.
Infrastructure as a demand driver
The Star's report highlighted that infrastructure and growth corridors remain key drivers of demand. Projects such as the Rapid Transit System Link in Johor and economic zones attract investors and buyers. Homes close to public transport and employment hubs tend to perform better than those in isolated locations.
What it means for Malaysians
For buyers, sellers and investors, the situation suggests a few practical points:
- First-time buyers should make full use of stamp duty relief and guarantee schemes, but still check that monthly repayments are comfortable.
- Location matters more than ever. Homes near transport and jobs are generally more resilient.
- Be careful with stalled projects. Check the developer's track record and project status before buying off-plan.
- Investors should be cautious in areas with high overhang, where rental yields and resale prices may be weaker.
Rehda's response to the budget
On the day of the budget, Malay Mail reported that Rehda backed Budget 2027's housing measures but called for more action on rising costs. This reflects a broad industry view: support for buyers is welcome, but developers face pressure from the cost side that ultimately feeds into prices. Finding a balance where homes remain affordable and projects remain viable is a long-standing challenge, and it will likely remain a central topic in property policy discussions throughout 2027.
What to watch
Watch for follow-up policies on abandoned projects, construction costs and approvals. Data on new launches, loan approvals and unsold units over the coming quarters will show whether the market is stabilising or still under pressure.