Malaysia & Johor Property Market Review (H1 / 2025)

Articles contributed to The Star (Property Market H1 / 2025)

"In 2H25, the residential property market is poised for steady growth..." Olive Tree Property Consultants commented

1. According to Napic, the residential property market in the first half of 2025 (1H25) saw a dip in volume and value to 120,307 units and RM49.37bil respectively, compared with 121,964 units and RM49.43bil in 1H24). In your opinion, was this within expectations? What do you think caused the drop in volume and value?

Yes, the softer numbers were largely within expectations. Nationwide, the slight dip in 1H/25 residential transactions (-1.4% in volume, -0.1% in value) reflects market consolidation after earlier rebounds.

Some possible factors are : (1) Cautious buyer sentiment amid inflation and global uncertainty (2) tighter financing and conservative bank approvals and (3) supply-demand mismatch with more mid/high-end units than affordable homes.  Overall, the decline is marginal and signals a stabilising rather than weakening market.

However, we noted that Johor property market showed a very different picture from the that of nationwide.  Johor residential market in 1H/25 saw an increase in volume and value to 21,061 units (+12.9%) and RM9.85 billion (+9.3%) respectively, compared with 18,648 units and RM9.02 billion in 1H/24.   The encouraging performance is also not unexpected.  Johor property market has been very bullish over the past one year due to a slew of positive factors such as the impending RTS, JS-SEZ and more buyers from Singapore and other States scouting for residential units.

2. How do you see the outlook of the residential property market in 2H25? What do you think will drive the sector? Additionally, what types of challenges do you foresee facing the market for the remainder of the year?

In 2H25, the residential property market is poised for steady growth with several supportive factors at play.  Demand should be lifted by potential policy incentives in Budget 2026, resilient owner-occupier needs in the affordable and mid-range segments, major infrastructure projects like the RTS Link, JS-SEZ and MRT3, as well as more market-aligned launches by developers.  Borrowing costs is poised to ease gradually as the US Federal Reserve is expected to slash the interest rate soon.  However, inflationary pressures and supply-demand mismatches particularly in the mid-to-high-end segment remain challenging.

Overall, affordable housing and connectivity-led growth corridors are expected to drive momentum, keeping the sector on a stable upward path.  For Johor residential market we remain bullish that it shall perform above expectation in 2H/2025 in view of the strong demand pipeline driven by the iconic projects and transformative policy.

Sr Tan Wee Tiam

Executive Director

Olive Tree Property Consultants