Malaysia's 2026-2035 Housing Policy to Shift Focus from Quantity to Matching Supply with Demand

Key figures

• ●The National Housing Policy for 2026-2035 shifts emphasis from the number of homes built to matching supply with genuine demand in terms of quantity, price and location
• ●Malaysia had 32,801 completed but unsold residential units in Q1 2026, with oversupply rising for six consecutive quarters
• ●46.9% of the unsold units in Q1 2026 were priced at RM300,000 or below
• ●PropertyGuru's Consumer Confidence Study found 56% of respondents plan to buy a home within two years and about 65% of potential buyers have budgets below RM500,000
• ●49% of respondents who currently rent plan to buy a home within two years; rental searches have outnumbered purchase searches on the platform over the past year

News summary

A Nanyang Property report says one of the most important shifts in Malaysia's National Housing Policy for 2026 to 2035 is that housing issues will no longer be measured mainly by how many homes are built, but by whether homes of the right quantity, price and location are provided for those who genuinely need them. The report argues that for many Malaysians, owning a home remains an important life goal, and the wish to own should translate into practical housing options that families can afford and sustain over the long term.

The report highlights that in the first quarter of 2026, Malaysia had 32,801 completed but unsold residential units, with residential oversupply rising for six consecutive quarters. Of these unsold units, 46.9% were priced at RM300,000 or below, showing that affordability cannot be measured by house prices alone. Income levels, loan eligibility, location, employment and transport access, property type, maintenance costs, and whether a family can bear the long-term financial commitment all determine whether a home truly fits a buyer, the report says.

Despite the oversupply, consumer intent to buy remains strong. The report cites PropertyGuru's Consumer Confidence Study conducted in the first half of the year, which found that 56% of respondents plan to buy a home within the next two years, and about 65% of potential buyers have budgets below RM500,000. The managing director of PropertyGuru and iProperty Malaysia, writing in the report, said the focus should therefore not simply be on increasing supply, but on improving the match between property type, price and location on one hand and buyers' financing capacity on the other.

The article calls for a gradual shift towards data-driven housing planning, integrating population, income, market and demand data at a more granular district level. This would allow policymakers to judge not only how many homes a market needs, but also what types of homes, what price ranges, and where they should be built. Better demand data would also help developers make more informed decisions early in the project planning stage, potentially reducing supply-demand mismatches at the source.

The report also notes that housing choices in Malaysia are becoming more diverse and flexible. Over the past year, rental searches on the PropertyGuru platform have consistently outnumbered purchase searches, while 49% of respondents who currently rent said they plan to buy a home within the next two years. The article says a more complete rental regulation framework could give tenants and landlords clearer protection, while mechanisms such as rent-to-own and shared ownership could offer consumers additional paths towards owning a home.

The report concludes that the real test of the policy will be implementation: whether newly built homes are actually absorbed by the market, whether families can afford them in the long run, and whether the homes match the needs of target communities. If data-based planning helps the government and industry detect supply-demand mismatches earlier and respond more precisely to local needs, it would be an important step towards a more efficient, consumer-oriented Malaysian housing market.