Malaysia cannot keep telling its young people that the country needs more affordable homes while billions of ringgit worth of completed houses and apartments sit unsold.
The uncomfortable truth is that Malaysia's housing problem is no longer just a shortage of homes. It is a failure to match what is being built with what Malaysians can afford, where they want to live, and what banks are willing to finance.
The latest figures should jolt us awake.
According to the National Property Information Centre (NAPIC), 33,094 completed residential units worth RM17.78 billion remained unsold in the first half of 2026, compared with 30,471 units worth RM17.73 billion in the second half of 2025.
The problem is even worse for serviced apartments, with 23,375 completed units valued at RM19.33 billion reportedly still unsold.
These are not just property-market statistics. They represent land, construction materials, labour, infrastructure and financing already committed to homes that have not found real demand.
The question policymakers must now face is simple:
Why is Malaysia building homes first and looking for buyers afterwards?
An equally important question follows: how much of the eventual cost will taxpayers be expected to bear when government incentives, guarantees or tax measures are introduced to clear the stock?
A new Home Ownership Campaign may help some buyers and developers, but it cannot become a recurring mechanism for rescuing housing projects from poor demand forecasting.
Malaysia needs a fundamental change in the way housing is planned, approved and financed.
A RM300,000 property may be labelled "affordable", but affordability cannot be determined by the price tag alone.
A first-time buyer must still find a deposit, qualify for a mortgage, service monthly instalments, pay maintenance and other ownership costs and, in many cases, absorb substantial transportation expenses if the property is far from employment centres.
For a young Malaysian earning a modest income, a nominally affordable house can therefore remain completely out of reach.
This is why the current overhang should become a catalyst for reform rather than another reason to stimulate demand temporarily.
Stop measuring affordability by price alone
Malaysia needs an affordability index at district level rather than relying mainly on national or state-wide figures.
Such an index should incorporate median household income, house prices, mortgage repayments, deposits, household debt, transport costs and maintenance charges.
More importantly, the Government should publish homeownership rates by age group.
As property consultant pointed out, existing data does not adequately distinguish between young people who cannot afford to buy and those who can afford to buy but prefer renting or delaying ownership.
Without that information, policymakers are effectively flying partially blind.
Development approvals need a new discipline
The biggest lesson from the present overhang is that Malaysia cannot continue approving housing projects on the assumption that future demand will automatically materialise.
A major development approval should therefore be accompanied by a proper Housing Demand Impact Assessment.
Developers and approving authorities should be able to demonstrate who the intended buyers are, what their incomes are, how many comparable properties already exist, the level of existing overhang, the availability of public transport and where employment centres are located.
This does not mean imposing a blanket freeze on development.
Some locations genuinely need more homes, particularly around public transport and employment corridors.
The problem is approving the wrong type of housing in the wrong location.
Public money must not become a developer safety net.
There is understandable support for another Home Ownership Campaign to absorb completed units.
A new HOC should not simply encourage Malaysians to purchase properties at prices that the market has already shown to be difficult to sustain.
If public money, tax exemptions or government guarantees are involved, taxpayers deserve to know exactly who benefits.
Any intervention should disclose the amount of public money committed, the developer's contribution, the discount provided to buyers, the number of units absorbed and the measurable social benefit.
The principle should be straightforward:
Public money should solve a public housing problem, not protect private profit margins.
Where developers have substantial unsold completed stock, government assistance should be conditional on meaningful price adjustments or other contributions from developers.
Use existing homes creatively
Some completed but unwanted properties could be repurposed.
Depending on location and suitability, they could become affordable rental units, rent-to-own homes, accommodation for essential workers, student housing, senior living facilities or public-sector accommodation.
This would be preferable to leaving billions of ringgit of completed housing underutilised.
But such conversions must be economically assessed, not every empty property is suitable for every purpose.
Fix the financing bottleneck
Another fundamental problem is that potential buyers may be unable to obtain mortgages even when properties appear affordable.
This is particularly relevant to gig workers and people with irregular incomes.
Malaysia should develop more sophisticated methods of assessing genuine repayment capacity using documented bank transactions, EPF contributions, tax records and other reliable evidence rather than relying excessively on conventional salaried employment models.
Government guarantees can play a role, but they must be carefully targeted.
The objective must not be to transform an affordability problem into a household-debt problem.
Establish a National Housing Demand Observatory
Malaysia should establish a permanent mechanism bringing together NAPIC, the Department of Statistics Malaysia, Bank Negara Malaysia, the Housing and Local Government Ministry, Finance Ministry, state governments and local authorities.
Its task would be to continuously monitor housing demand and supply at the district and even neighbourhood level.
Every locality could be classified according to whether it is undersupplied, balanced or experiencing significant overhang.
Planning approvals could then respond to evidence rather than speculation.
This would also help prevent the long development cycle from becoming a policy trap. A project conceived three or four years ago may be completed into an entirely different economic environment.
The taxpayer deserves a better system.
The RM17.78 billion residential overhang is not merely a property statistic.
Behind every unsold development are land, construction materials, infrastructure, financing, labour and economic resources that have already been committed.
If government subsequently uses taxpayers' money to stimulate purchases, the public could end up paying twice. First through infrastructure and incentives associated with development, and later through measures designed to clear the resulting overhang.
Malaysia needs to break this cycle.
The question should no longer be “How many houses can Malaysia build?”
It should be:
“How many homes do Malaysians actually need, where do they need them, what can they afford, and can they obtain financing to buy or rent them?”
The answer should determine what gets approved.
Malaysia does not necessarily need more houses. It needs the right houses, in the right places, at prices households can genuinely afford and finance.
That is how the present overhang can be reduced and, more importantly, how taxpayers can be protected from having to repeatedly pay for tomorrow's housing mistakes.
K.T.Maran Social Environmental Animal Activist
K.T. Maran (maran.kt@gmail.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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