Residential Market

Majority of these transactions are in the RM 100,000 to RM 300,000 price bracket.

In contrast, the high-rise residential segment remained active, registering 5,986 transactions with collective value of RM 4.7 billion. Year-on-year, the transacted volume and value were higher by 5.1% and 18.9%, respectively.

The completion of 3,558 units during the review period represents a 2.9% increase in cumulative supply. The impending completion of some 9,170 units by 2H2026 will increase the existing stock by 7.2%, mainly in KL City, Bukit Kiara and Ara Damansara / Tropicana Damansara.

Despite a more cautious and selective buying environment, there is sustained confidence in well-located projects by reputable developers that offer good connectivity, lifestyle amenities and potential for capital appreciation.

Higher-priced luxury developments generally recorded moderate take-up rates, while projects featuring more accessible entry prices, compact layouts and practical built-ups achieved good sales momentum. Property purchasers continue to prioritise affordability and investment viability, especially in KL City, where rental demand remains relatively resilient. Several developments continue to introduce sales and leaseback and rental programmes as part of marketing strategies to attract yield-oriented investors.

Buyers continue to favour well-connected and established locations, while emerging growth corridors are gradually gaining traction and showing stronger potential for future value growth.

There is sustained demand in established residential enclaves popular with urban professionals and expatriates, supporting rental stability despite subdued growth across the broader market.

Together with full stamp duty exemption for first-home purchases up to RM 500,000 under Budget 2025 and Budget 2026, these initiatives are expected to sustain homebuyer confidence and preserve housing affordability.

Effective 1 January 2026, Malaysia introduced a flat 8% stamp duty on the transfer of residential properties acquired by foreign buyers, replacing the previous 4% rate. Under Budget 2026, the government also introduced a commercial-to-residential conversion framework supported by a 10% tax deduction capped at RM 10 million on qualifying renovation and conversion costs.

Malaysia's efforts to attract expatriates, skilled professionals and HNWIs — including the Employment Pass+, investment-friendly policies and the restructured MM2H programme — are expected to support demand for higher-end residential properties in prime locations, particularly within Kuala Lumpur.

Sustainability has become an increasingly important consideration in the prime residential market, with developers placing greater emphasis on green building certifications (GBI, GreenRE and LEED), energy-efficient building systems, smart home technologies and wellness-oriented amenities.

However, transaction volume and value declined by 28.9% and 31.5% respectively, largely attributable to Johor Bahru, which accounts for approximately 97% of the state's high-rise residential supply. While positive sentiment surrounding the RTS Link continues to support the market's long-term prospects, affordability considerations are increasingly influencing purchasing decisions.

Price growth appears to be moderating as the sector transitions from expectations-driven growth into a more mature phase. Growing competition from newly launched projects, together with a rising overhang and a substantial pipeline of upcoming high-rise developments, has contributed to more measured buyer sentiment.

Aethera Residence and Pine Legacy command premium selling prices, largely due to their proximity to the upcoming RTS Link Station.

This continued the moderation observed in 2025, when transaction volume and value also recorded declines of 4.9% and 7.0%, respectively. Buyer demand remained resilient in the affordable and mid-priced segments, with transactions concentrated in properties priced between RM 200,000 and RM 400,000.

The stratified high-rise segment demonstrated relative resilience despite mixed performance across property types. Overall, transaction volume for high-rise residential properties declined marginally by 2.0% y-o-y to 694 units, although transaction value increased by 0.6% y-o-y to RM 448.3 million. The majority of high-rise transactions remained concentrated in Timur Laut.

However, high-rise properties with larger built-up sizes in George Town showed lower asking prices, attributed to schemes such as The Palazzo, 11 Gurney and Gurney Palace. In contrast, Tanjung Tokong and Tanjung Bungah illustrated relatively higher asking prices, contributed by increased asking prices for Springtide Residences and Infinity.

The Fount adopts a low-density, family-oriented luxury condominium concept centred on privacy and exclusivity, while AVEA is positioned as a higher-density, lifestyle-driven serviced apartment targeting a broader urban market.

This follows a positive performance in 2025, when residential transaction volume and value increased by 4.6% and 4.5% respectively to 5,678 transactions worth RM 2.4 billion.

The positive growth in overall transaction volume and value was reflected across both the landed and high-rise residential segments in 1Q2026, with transaction volume increasing by 3.9% and 4.8%, respectively, while transaction value rose by 7.3% and 9.0%, respectively. In general, landed residential properties continued to record a higher number of transactions than high-rise properties, underscoring the sustained preference for landed housing in Sabah.

Notably, 2-storey terraced houses accounted for the largest share of landed residential launches, reflecting sustained demand for this property type.