Mismatch in affordable housing driving property overhang, says PropertyGuru
PropertyGuru Malaysia country manager Kenneth Soh noted that the issue extends beyond pricing, with factors such as location, connectivity, and overall liveability playing a significant role.
"The mismatch is more prevalent in the lower-priced market. We have spoken to government agencies and associations, and what we found is that pricing alone doesn't determine demand.
"A property might be affordable but not appealing if it is too far from key amenities or located in areas with heavy traffic, making the total cost of ownership higher in other ways," he said during PropertyGuru Group's 2024 sustainability report launch & market outlook briefing today.
Kenneth noted that based on transaction figures, homes priced below RM500,000 continue to dominate in terms of volume, indicating strong demand in this segment.
He emphasised that for industry players, the key takeaway is that regardless of price, everyone should have access to safe, comfortable, and well-connected housing.
"Buyers today also consider more than just price, and that is where a lot of the mismatch happens — in how we align what is offered with what people actually want and need,"
Data from the Valuation and Property Services Department (JPPH) shows that residential properties priced below RM300,000 recorded the highest overhang by price category, with 7,135 unsold units representing 30.3 per cent of total overhang.
Homes priced between RM300,000 and RM500,000 followed closely, with 6,813 units making up 29 per cent, while those in the RM500,000 to RM1 million range accounted for 28.6 per cent, with 6,713 units unsold.
In contrast, properties priced above RM1 million had the lowest share, comprising 12.1 per cent of the overhang, with 2,854 units remaining on the market.
Commenting on the market outlook, Kenneth said that although there was a decline in property data for the first quarter of 2025 (1Q25), the overall trend since the post-Covid reopening has been steadily improving.
"We have seen quarter-on-quarter and year-on-year growth. I don't think, at least from our point of view, this one data point is not yet a particular red flag. The recent dip could be due to seasonality or other factors in the market. It is a fairly stable landscape, with different hotspots showing varying dynamics.
"If you look at Johor, there is a rising sense of optimism. This is largely driven by positive developments in the area, supportive policies, and spillover effects from Singapore. In Kuala Lumpur, the market appears more stable, with demand and supply relatively balanced. Similarly, in Penang, the overall outlook remains steady," he said.
Findings from PropertyGuru's 2024 survey reveal that 83 per cent of Malaysians are open to paying a premium for homes with sustainable features, valuing benefits like lower utility bills, better climate resilience, and long-term value preservation.
PropertyGuru Group head of sustainability Cécile Corda, said the demand for sustainable and inclusive houses has been growing.
"By equipping property seekers and real estate stakeholders with the tools to make informed, sustainable choices, we're helping to build cities that are not only resilient but grounded in principles of inclusivity," she said.
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