MALAYSIA cannot keep telling young people that the country needs more affordable homes while billions of ringgit worth of completed houses and apartments sit unsold.
The uncomfortable truth is that Malaysia’s housing problem is no longer simply a shortage of homes. It is also a failure to match what is being built with what Malaysians can afford, where they want to live and whether they can secure financing.
The latest figures should jolt us awake.
According to the National Property Information Centre (NAPIC), 33,094 completed residential units worth RM17.78 bil remained unsold in the first half of 2026, up from 30,471 units worth RM17.73 bil in the second half of 2025.
Another 23,375 completed serviced apartments worth RM19.33 billion remained unsold.
These are not merely property-market statistics. They represent land, construction materials, labour, infrastructure and financing already committed to homes for which demand has not materialised.
So why are we still building homes first and looking for buyers afterwards?
The answer cannot simply be to stimulate demand whenever the stock piles up.
A new Home Ownership Campaign has been proposed for Budget 2027, specifically to help absorb unsold completed units. Such a measure could provide short-term relief, but it should not become a recurring mechanism for rescuing projects from poor demand forecasting.
Malaysia needs to change how housing is planned, approved and financed.
Affordability is more than a price tag
A RM300,000 property may be labelled affordable, but affordability cannot be determined by the selling price alone.
A first-time buyer still needs a deposit, must qualify for a mortgage and service monthly instalments, while also paying maintenance, insurance, taxes and other ownership costs. If the property is far from employment centres, transportation can add another substantial burden.
For a young Malaysian on a modest income, a nominally affordable house can therefore remain completely out of reach.
This is why Malaysia needs better measures of affordability at the district and local level, taking into account household incomes, house prices, financing costs and other ownership expenses.
The recently launched National Housing Policy 2026‒2035 is already moving towards data-driven planning, with the government saying housing needs should be assessed according to individual districts, local incomes, property prices and the types of homes actually required.
The challenge now is to make that approach meaningful and transparent.
Approve homes according to actual demand
The biggest lesson from the present overhang is that Malaysia cannot continue approving housing projects on the assumption that future demand will automatically materialise.
Development proposals should demonstrate who the intended buyers or tenants are, their likely income levels, how much comparable housing already exists, the level of existing overhang, access to public transport and proximity to employment centres.
This does not mean freezing development.
Some areas genuinely need more homes, particularly around public transport and employment corridors. The problem is building the wrong type of housing in the wrong location.
Public money must not become a developer safety net
If a special HOC is introduced, its purpose should be to help genuine buyers, not simply clear developers’ balance sheets.
Where public money, tax exemptions or government guarantees are involved, taxpayers should know how much is being committed, how much developers are contributing, what discounts buyers receive and what measurable public benefit results.
Where developers have substantial unsold completed stock, assistance should be conditional on meaningful price adjustments or other contributions from developers.
The principle should be simple:
Public money should solve a public housing problem, not protect private profit margins.
Use existing homes creatively
Some completed but unwanted properties could also be repurposed, depending on location and suitability, as affordable rental units, rent-to-own homes, accommodation for essential workers, student housing, senior living or public-sector accommodation.
Not every empty property will be suitable for every purpose, but leaving billions of ringgit worth of completed housing underused should not automatically be the default.
Fix the financing bottleneck
Affordability also means being able to obtain financing.
This is particularly important for gig workers, self-employed Malaysians and people with irregular incomes. The government has already expanded the Housing Credit Guarantee Scheme to support borrowers without conventional fixed incomes.
The next step should be to improve how genuine repayment capacity is assessed, using reliable evidence such as documented bank transactions, EPF contributions and tax records where appropriate.
Government guarantees can help, but they must be carefully targeted. The objective cannot be to transform a housing-affordability problem into a household-debt problem.
Build the right homes, not simply more homes
Malaysia’s new housing policy and data-driven planning approach provide an opportunity to break from the old cycle of building first and discovering demand later.
Housing demand should be monitored continuously at district and local levels, with areas identified as undersupplied, balanced or experiencing significant overhang.
A project conceived three or four years ago may be completed into an entirely different economic environment. Planning must be flexible enough to recognise that reality.
The RM17.78 bil residential overhang is not merely a property statistic. It represents resources already committed to homes that people have not bought.
Malaysia therefore needs to stop asking simply, “How many houses can we build?”
The better questions are:
How many homes do Malaysians actually need? Where do they need them? What can they genuinely afford? And can they obtain financing to buy or rent them?
The answers should determine what gets approved.
Malaysia does not necessarily need more houses. It needs the right homes, in the right places, at prices households can genuinely afford and finance.
That is how we reduce the overhang, improve homeownership and, ultimately, protect taxpayers from repeatedly paying for tomorrow’s housing mistakes.‒Oct 5, 2026
KT Maran is a Focus Malaysia reader.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main image: KL Property
