Talk of another looming housing glut has resurfaced after new data suggested close to 100,000 residential units nationwide remain without buyers. While the Housing and Local Government Ministry insists the situation is under control, a deeper look at the numbers reveals persistent cracks in the affordability wall.
Signs of a Market Strain
Based on records compiled by the National Property Information Centre (NAPIC), the combined tally of unsold homes spans completed units, those under construction, and even projects approved but yet to break ground. When counted together, the figure edges toward 100,000 — a number hard to dismiss, especially in a country where household income growth lags behind the cost of living.
The largest portion of these unsold homes sits in the RM200,001–RM300,000 “affordable” band, followed closely by properties between RM300,001 and RM400,000. Theoretically, these are price points aimed at first-time buyers and young families — yet demand still trails supply.
In the first quarter of 2025 alone, 12,498 new units hit the market, but only 1,351 (just 11 percent) were taken up within three months. Terraced houses of two and three storeys made up nearly 40 percent of new launches, with condominiums and apartments adding another 27 percent. Johor, Selangor, Negri Sembilan and Perak accounted for the bulk of the new stock.
The Overhang Picture
NAPIC defines “overhang” as completed homes unsold for at least nine months. As at Q1 2025, there were 23,515 such units nationwide. The “affordable” RM200,001–RM300,000 segment made up the largest slice at 4,861 units (20.7 percent), followed by 4,201 units in the RM300,001–RM400,000 range.
Condominiums and apartments dominate the unsold landscape with 13,386 units — nearly 57 percent of total overhang. Two- and three-storey terraced homes account for 15 percent. Perak leads the affordable overhang with 1,254 units, trailed by Kuala Lumpur (880), Pahang (647) and Penang (624). Melaka’s situation is notable at the lower end, with 181 homes between RM100,001 and RM200,000 languishing.
Affordability Crunch
Numbers alone don’t explain the gap between launch and sale. The root cause lies in the mismatch between income and price. The median house price nationwide now stands at RM359,000, while the Department of Statistics pegs the median household income at RM6,338 a month.
Bank Negara Malaysia’s “median multiple” measure treats homes as affordable only if they cost less than three times annual income. At current levels, Malaysia’s ratio is 4.72 — well above the safe line. In real terms, a household would need to earn roughly RM9,972 monthly to comfortably afford a RM359,000 property. Instead, the price most families can realistically manage hovers around RM228,000.
The imbalance worsens in specific states. In Sarawak, where median household income is RM4,978, the median house price stands at RM395,000. Johor’s families earn a median RM6,879 but face a RM450,000 median house price. New launches above RM400,000 in these states stretch budgets even further, with hundreds of units priced half a million ringgit or more entering already crowded markets.
Developers Keep Adding Stock
Despite warning signs, developers continue to introduce fresh inventory. Johor, carrying hundreds of unsold units in the RM500,001–RM600,000 range, rolled out another 417 homes in the same bracket during Q1. Perak launched 829 new units in the RM300,001–RM400,000 range even though 815 homes in that segment remain unsold.
Penang struggles at the high end, with 646 units above RM1 million without takers, while Selangor shows similar overhang in the RM500,001–RM600,000 category. Sabah has hundreds of units priced above RM1 million still on the shelf.
Ministry Pushes Back
Amid talk of a glut, the Housing and Local Government Ministry has sought to calm nerves. In an official statement, it dismissed the “100,000 unsold homes” headline as misleading, stressing that many of those units are either still being built or merely approved, not truly languishing on the market.
Pointing to official NAPIC statistics, the ministry highlighted a steady fall in unsold completed units: 35,592 in 2022, 26,872 in 2023, 24,208 in 2024, and 23,515 in the first quarter of 2025. “The national housing market remains stable and under control,” it said, attributing the trend to policy reforms and closer monitoring of supply.
To tighten reporting, the ministry is working with NAPIC on the “One Data for One Country” programme — a unified housing database designed to harmonise numbers from state governments, developers, and federal agencies. Officials argue the system will ensure clarity, prevent double-counting, and provide a single source of truth for policy decisions.
Reading Between the Lines
The government’s data shows real progress in reducing overhang, but the affordability gulf remains stubborn. Unless wages rise or price structures adjust, even “affordable” homes may continue to miss the mark for average households. Whether Malaysia is facing a true glut or simply a mismatch of income and aspiration will depend on how swiftly policies bridge the gap — and whether developers heed the warning signs already flashing in the numbers.
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