Affordable housing to drive Malaysia's property market in 2026

Government initiatives, expanded loan guarantees and new protections for gig workers are set to broaden homeownership access this year.

By Khalil Adis

A shophouse in Negeri Sembilan with Malaysian flag. Photo: Khalil Adis Consultancy.

Malaysia's property market in 2026 will be shaped largely by demand for affordable housing, underpinned by a slate of government measures aimed at bringing more Malaysians into the property market.

"For 2026, Malaysia's economy is projected to grow at a moderate pace of between 4.0 and 4.5 percent, weighed down by prevailing global uncertainties due to ongoing geopolitical and geoeconomic tensions," said Prime Minister Anwar Ibrahim in his Budget 2026 speech in October last year.

On the supply side, affordable housing projects under the Perumahan Rakyat Residensi (PRR) and Rumah Mesra Rakyat (RMR) programmes worth RM672 million are due for completion this year, including PRR Ayer Lanas in Kelantan and PRR Masai in Johor, benefiting some 33,000 residents.

Gig workers get a path to homeownership

A GrabFood delivery person. Photo: Khalil Adis Consultancy.

One of the more significant shifts in 2026 is the extension of homeownership support to gig workers and the self-employed - a segment long excluded from conventional financing due to irregular income and the absence of formal employment contracts.

Malaysia's gig economy counts roughly 1.2 million workers, according to Human Resources Minister Steven Sim Chee Keong, who was blunt about the gap in protections when speaking in Parliament.

"For too long, 1.2 million Malaysians in the gig sector have worked daily without proper labour protection, as if their contributions to the economy did not deserve recognition. This bill ends that injustice," he said.

To make homeownership more accessible for this group, the government has doubled the Syarikat Jaminan Kredit Perumahan (SJKP) guarantee ceiling from RM10 billion to RM20 billion, enabling an additional 80,000 first-time buyers to access mortgage guarantees.

This comes on the heels of the Gig Workers Bill 2025, passed in August last year, which for the first time requires platforms such as Grab and Foodpanda to provide formal contracts covering payment terms, insurance and termination procedures.

The law also bans arbitrary account deactivations and unilateral rate changes, and establishes a tribunal to handle disputes.

Workers will also be covered under Socso and EPF for the first time.

Stamp duty relief extended

Photo by Nataliya courtesy of Pexels.

Further support is available for first-time buyers.

Those purchasing homes priced up to RM500,000 will continue to enjoy stamp duty exemptions on transfer deeds and loan agreements, with the relief extended to December 31, 2027.

Taken together, these measures point clearly in one direction: the property market in 2026 will favour affordable properties.

Johor: Malaysia's hottest investment corridor

View of JB Sentral. Photo: Khalil Adis Consultancy.

While affordable housing dominates the broader market, Johor stands out as the market to watch for investors in 2026.

According to the Malaysian government, the Johor-Singapore Special Economic Zone (JS-SEZ) recorded RM37.1 billion in approved investments in the first half of 2025 alone -  representing 66 percent of Johor's total investments -  with a further RM29 billion in new investment commitments secured.

In his Budget 2026 speech, Prime Minister Anwar Ibrahim said the JS-SEZ "has strengthened investor confidence in Johor as Malaysia's strategic gateway.”

Supporting this momentum, the Iskandar Malaysia Facilitation Centre is streamlining approval processes through the Johor Super Lane, cutting local authority approval timeframes.

The Johor Talent Development Council is also working to link universities with industry to build the skilled workforce needed to sustain long-term growth - a factor that typically anchors residential demand around economic zones.

Johor Bahru Sentral, in particular, will be an area to watch due to the planned opening of the Johor Bahru–Singapore Rapid Transit System (RTS) Link in January 2027.

Key sectors set to enjoy the economic spillover include real estate, tourism, retail, food and beverage, financial services and transportation.

Growth areas: Rail connectivity opening up new property corridors

Butterworth KTM Station will be an interchange station to the Mutiara Line. Photo: Khalil Adis Consultancy.

Beyond Johor, major infrastructure completions are reshaping property investment prospects across the country.

Several rail projects flagged in Budget 2026 are either recently operational or nearing completion - and history shows that rail connectivity consistently lifts surrounding property values.

In the Klang Valley, the LRT3 connecting Bandar Utama to Johan Setia, Klang - with capacity for over 6,200 passengers per hour per direction - was expected to begin operations by end-2025, opening up the Klang corridor.

The ETS rail service has also extended to Kluang, with the final leg to Johor Bahru Sentral targeted for completion around the same time.

In the north, the Mutiara LRT Line in Penang has commenced construction and is set to benefit an estimated 1.8 million residents and 3.5 million visitors when it opens in December 2031.

The line is expected to unlock property values along its route and drive significant investor interest in Penang's market.

On the east coast, the ECRL Phase 1 from Kota Bharu to Gombak is due for completion by end-2026, slashing travel time between Kelantan and the Klang Valley to four hours.

This will likely sharpen investor interest in properties along the corridor, particularly in areas currently underserved by connectivity.

Longer term, the Klang Valley Double Track Phase 2 (KVDT2) - connecting Bandar Tasik Selatan to Seremban and Simpang Pelabuhan Klang to Port Klang at a cost of RM4.1 billion - is targeted for full completion by 2029.

The big four states among foreign and local investors

The busy intersection at Jalan Bukit Bintang, Kuala Lumpur. Photo: Khalil Adis Consultancy.

The key states to watch among both foreign and local investors are Kuala Lumpur, Selangor, Johor and Penang.

For a detailed analysis on the growth areas, refer to my article here.

Increase in stamp duty for foreign buyers and companies

Photo by Nataliya Vaitkevich courtesy of Pexels.

One measure that could influence foreign buying activity is the government's plan to impose a flat rate stamp duty on residential property transfers - doubling the rate from four to eight per cent for non-citizens and foreign companies.

The move is aimed at keeping house prices competitive for Malaysians.

Individuals with permanent resident status in Malaysia will be exempted.