Kuala Lumpur, 18 September 2025 — Despite lingering economic headwinds, analysts at Hong Leong Investment Bank (HLIB) reaffirm a cautiously positive outlook for Malaysia’s property market in the second half of 2025. The property sector, they say, continues to show signs of resilience, driven by selective demand, supportive policy measures, and improving affordability.
HLIB notes that while the first half of the year displayed mixed results, certain segments such as well-located residential properties and affordable housing maintain strong interest from buyers. Demand in projects nearer public amenities, transport-oriented developments, and suburban growth corridors remain relatively stable. Meanwhile, developers are keeping launches moderate and more targeted, helping contain oversupply risks, especially in the high-rise and luxury segments.
Key catalysts supporting this constructive outlook include expectations of lower borrowing costs, following a forecasted cut in the Overnight Policy Rate (OPR), which would ease financing costs for both developers and homebuyers. Additionally, strong government housing initiatives, fiscal measures directed at first-time homebuyers, and infrastructure-led growth in specific zones (especially in Johor and Greater Klang Valley) are being seen as supportive factors.
HLIB does highlight that risks remain. Oversupply in select sub-markets, rising construction and material costs, and global macro-uncertainties (such as trade tensions and foreign investor sentiment) may restrain further upside. Moreover, the luxury or high-end developments may continue to face weak take-up unless incentives or pricing adjustments are introduced.
Overall, HLIB’s view is that while expectations for dramatic growth are tempered, the property sector is not in retreat. Instead, the narrative is one of selective strength, disciplined development, and opportunity for those positioned in affordable, well-connected, and policy-aligned property segments.
