For many Malaysians and foreign investors, the question “is now a good time to buy property in Malaysia?” has become increasingly complex as we move through 2026. The market has shifted from the volatile post-pandemic recovery phase into a period defined by stabilisation and "relevance," rather than broad-based appreciation.
Determining the right timing requires looking beyond simple price indices. Prospective buyers must weigh the impact of the reduced Overnight Policy Rate (OPR), the divergence between high-rise and landed property performance, and significant policy shifts introduced in Budget 2026.
This comprehensive guide analyses the current market landscape using the latest data from the National Property Information Centre (NAPIC), Bank Negara Malaysia (BNM), and industry experts to help first-time buyers, upgraders, and investors make informed decisions.
Current Market Conditions: A 2026 Data Snapshot
To answer whether it is a good time to buy, we must first understand the "stabilisation" phase the market has entered. The days of rapid, speculative price hikes appear to be over for the general market, replaced by a trend where quality assets appreciate while generic properties stagnate.
1. Price Trends: Stability Over Volatility
According to NAPIC’s Q3 2025 data, the Malaysian House Price Index (MHPI) grew by a marginal 0.1%, reaching 229.1 points with an average house price of RM494,384. This indicates a market that is taking a "breather".
However, national averages conceal significant disparities. While the national index is flat, specific states are seeing robust growth, while others are correcting. For instance, Perlis recorded the highest year-on-year growth at 7.2%, followed by Johor at 5.7%. Conversely, Kuala Lumpur saw a price correction, with the index dropping by 4.3%.
2. Transaction Volume vs. Value: The Shift to Quality
A critical trend in the Malaysia property market 2026 is the divergence between transaction volume and value. In Q3 2025, transaction volume dropped by 3.5%, yet the total transaction value surged by 12.5%.
This suggests a "flight to quality." Speculators flipping cheap units are exiting the market, replaced by serious homebuyers and investors purchasing higher-value, premium assets. The market is no longer rewarding volume; it is rewarding relevance—properties that offer genuine value, connectivity, and quality.
3. The Overhang Challenge
The issue of unsold completed units (overhang) remains a buyer's leverage point. As of Q3 2025, the residential overhang stood at 28,672 units valued at RM17.25 billion.
The overhang is not evenly distributed; it is heavily concentrated in high-rise segments (condominiums and serviced apartments), particularly in Kuala Lumpur and Johor. For buyers, this signals a "buyer's market" in the high-rise segment, where developers may offer significant rebates to clear stock.
Critical Factors Influencing Timing in 2026
Interest Rates and Financing Conditions
One of the strongest arguments for buying in 2026 is the favourable interest rate environment. In July 2025, Bank Negara Malaysia (BNM) reduced the Overnight Policy Rate (OPR) from 3.00% to 2.75%.
This reduction directly impacts monthly instalments. For a typical RM500,000 home loan, the rate cut can save homeowners approximately RM70–RM75 per month. While this may seem modest, over a 30-year tenure, the savings are significant. The lower OPR improves affordability, particularly for the M40 segment and first-time buyers, making 2026 a financially strategic window before rates potentially normalise upwards in the future.
Supply vs. Demand Dynamics
The Malaysia property price trend is heavily dictated by local supply dynamics.
- High-Rise Oversupply: With nearly 17,900 unsold serviced apartments, prices in this segment are under pressure. High-rise prices fell 1.1% nationally in the first half of 2025.
- Landed Property Resilience: In contrast, landed properties remain the preferred choice for Malaysians, accounting for 41% of transactions. Prices for terraced houses rose 2.4% in 1H 2025.
Buyers looking for landed homes face stiff competition and rising prices due to scarcity, whereas those seeking high-rise units have ample choices and negotiation power.
Infrastructure Developments
Infrastructure remains the primary catalyst for capital appreciation.
- RTS Link (Johor-Singapore): Scheduled for completion in late 2026/early 2027, this rail link is a game-changer. Properties within a 5km radius of the Bukit Chagar station have reportedly seen price increases of 18–20% even before operations begin.
- MRT3 (Circle Line): As the "missing link" in the Klang Valley rail network, MRT3 is expected to boost property values in connected areas like Mont Kiara, Desa ParkCity, and Petaling Jaya. Properties near these stations could see price premiums of 15–25%.
Regional Analysis: Where is the Growth?
When asking "is now a good time to buy property in Malaysia," the answer depends largely on where you buy.
Johor: The National Growth Engine
Johor has emerged as the star performer, driven by the Johor-Singapore Special Economic Zone (JS-SEZ) and the RTS Link. In the first half of 2025, residential transactions in Johor rose 13%, with prices climbing 5.7%.
The market in Johor Bahru is particularly hot, with serviced apartment prices surging 20.4% in Q2 2025 due to investor confidence. Experts estimate the SEZ could add RM19.8 billion to the GDP, centering growth in this region.
Kuala Lumpur: A Buyer’s Market
Kuala Lumpur presents a different narrative. It remains the most expensive market with an average price of RM771,057, yet the index dropped 4.3% year-on-year in Q3 2025.
This correction is driven by a massive overhang of high-end high-rise units. For investors with holding power, this price dip offers an opportunity to acquire prime assets at a discount, though rental yields must be carefully calculated against the 8% foreign buyer stamp duty if applicable. See our Bangsar South Market Outlook or Mont Kiara Market Outlook for specific area data.
Selangor: The Stable Core
Selangor’s market remains flat but stable (0.0% growth in Q3 2025). It continues to lead in transaction volume, driven by genuine demand for landed homes in suburbs. Projects near the upcoming LRT3 and MRT lines are seeing sustained interest.
Summary of Price Trends by Key State (YoY Q3 2025)
| State | Price Trend | Key Driver |
|---|---|---|
| Perlis | +7.2% | Affordable landed home demand |
| Johor | +5.7% | RTS Link, JS-SEZ, Industrial boom |
| Kelantan | +5.6% | Steady local demand |
| Selangor | 0.0% | Mature market, stable demand |
| Kuala Lumpur | -4.3% | High-rise oversupply correction |
Government Incentives and Policy Changes (2026)
Budget 2026 and recent policy reforms play a crucial role in the property investment Malaysia landscape.
- Stamp Duty Exemptions Extended: The government has extended the full stamp duty exemption for first-time homebuyers purchasing properties priced up to RM500,000 until 31 December 2027. This significantly reduces upfront costs for new entrants.
- Housing Credit Guarantee Scheme (SJKP): To assist those without fixed income documents (gig workers, freelancers), the SJKP has been expanded to RM20 billion. This initiative aims to help over 100,000 Malaysians secure financing in 2026.
- Foreign Buyer Stamp Duty Hike: A cooling measure introduced is the increase in stamp duty for foreign buyers (non-citizens and foreign companies) from 4% to 8%. While this may dampen high-end speculation in KLCC and Mont Kiara, it is intended to prioritise local homeownership.
- Zero Abandonment Goal: Under the "Madani Housing Reforms," the government aims for zero abandoned projects by 2030. New laws, such as the Real Property Development Bill and stricter HDA audits, are being rolled out to protect buyer funds. This reduces the risk of buying under-construction properties.
Actionable Guidance for Buyer Segments
First-Time Home Buyers
Verdict: Yes, it is a good time.
- Why: You have a unique window where interest rates are lower (2.75% OPR) and stamp duty is fully exempted for homes under RM500k.
- Strategy: Focus on the RM300k–RM500k price bracket. Look for condominiums near transit lines (TODs) or affordable landed homes in outer suburbs like Semenyih or Rawang. Take advantage of the SJKP if you lack traditional income documentation.
Upgraders
Verdict: Proceed with caution and selectivity.
- Why: While selling your current home might take longer due to market competitiveness, upgrading is viable if you target landed properties in established townships.
- Strategy: Gen Z and young millennials are driving demand for larger units and landed homes. Look for "future-proof" townships in Selangor or Johor that offer security, green certifications, and proximity to schools.
Investors
Verdict: Shift strategy from capital gains to rental yield.
- Why: Broad capital appreciation is slow (except in Johor). The market is moving from "resilience to relevance," meaning only assets that meet specific occupier needs (ESG compliance, connectivity) will perform.
- Strategy:
- Hotspot: Johor Bahru near the RTS Link for capital growth potential.
- Niche: Student accommodation or industrial property (logistics/warehousing), which is seeing strong growth.
- Avoid: Generic high-rise units in KL City Centre unless they are distinctively priced or have unique selling points, as the rental market is competitive and prices are correcting.
Conclusion: A Market at a Crossroads
Is now a good time to buy property in Malaysia? The answer for 2026 is yes, but only for the strategic buyer.
The market is no longer a rising tide that lifts all boats. It is a market of specific opportunities. For first-time buyers, the combination of government incentives and lower interest rates creates a supportive environment. For investors, the "easy money" of flipping properties is gone; success now depends on identifying infrastructure catalysts like the RTS Link in Johor or MRT3 in the Klang Valley.
With price growth forecast to be moderate at 2–4%, 2026 is a year for acquiring assets for long-term hold and utility, rather than short-term speculation.
Frequently Asked Questions (FAQ)
Will property prices keep rising in Malaysia in 2026?
Property prices are expected to rise moderately rather than sharply. Analysts forecast a growth of 2% to 4% for 2026. However, growth is uneven; states like Johor (+5.7%) and Perlis (+7.2%) are seeing higher appreciation, while Kuala Lumpur recently recorded a slight price correction of -4.3%.
How do interest rates affect property buying in 2026?
The Overnight Policy Rate (OPR) was reduced to 2.75% in July 2025. This lower rate reduces monthly loan repayments, improving affordability for buyers. For a RM500,000 loan, this cut can save borrowers approximately RM70–RM75 per month compared to previous rates.
What’s the best strategy for buying property in 2026?
The best strategy is to focus on "quality" and "connectivity." Avoid generic high-rise units in oversupplied areas. Instead, target landed properties in growing townships or high-rises adjacent to key infrastructure like the RTS Link in Johor or MRT3 stations in the Klang Valley. First-time buyers should utilise the stamp duty exemptions valid until 2027.
Is there a property overhang in Malaysia?
Yes, as of Q3 2025, there were 28,672 unsold completed residential units. The overhang is heavily concentrated in the high-rise segment (serviced apartments and condominiums), particularly in Johor and Kuala Lumpur. This gives buyers in this segment more negotiation power.
Can foreigners still buy property in Malaysia in 2026?
Yes, foreigners can buy property, but entry costs have increased. Budget 2026 raised the stamp duty for foreign buyers from 4% to 8%. Foreigners are generally advised to focus on high-end segments or regions like the Johor-Singapore Special Economic Zone (JS-SEZ) where long-term value is projected to be stronger.
