Budget 2026 marks a return to steady and confidence-driven policymaking. At a time shaped by global headwinds and domestic cost-of-living pressures, Malaysia’s emphasis on fiscal discipline and targeted support provides much-needed reassurance. With a projected GDP growth of between 4.0 and 4.5 percent in 2026 and subsidy rationalisation expected to save approximately RM15.5 billion annually, the government has created fiscal space to prioritise welfare, infrastructure, and housing programmes that directly benefit Malaysians.
Stability in this context is not passive but an active catalyst to rebuild confidence and sustain long-term growth. While Budget 2026 may not be expansionary in tone, its substance is stabilising. This focus on stability sets the foundation to restore market confidence and encourages deliberate and sustainable decision-making from both developers and homebuyers.
The government’s allocation of RM6.09 billion to the Ministry of Housing and Local Government reflects its continued commitment to improving urban liveability and community wellbeing. Within this amount, RM143 million has been reserved for stratified housing maintenance such as lift replacements, while RM672 million has been allocated to the People’s Residency Programme and Rumah Mesra Rakyat, benefitting more than 33,000 residents nationwide. Additional allocations include RM60 million for the construction and repair of public markets and stalls, and RM55 million for drainage improvements in local authority areas. These measures are designed to strengthen the broader environment that makes housing liveable, safe, and sustainable.
Malaysia’s housing policy is moving beyond quantity-driven goals. The priority is no longer solely to increase supply but to ensure that homes and neighbourhoods are well-maintained, connected, and dignified. This represents a shift in policy towards long-term liveability and resilience, while keeping affordability in focus.
For homebuyers, Budget 2026 brings continuity and clarity. The full stamp duty exemption for first-time buyers purchasing properties valued up to RM500,000 has been extended until December 2027, offering predictability for those making long-term commitments. The expansion of the Housing Credit Guarantee Scheme by an additional RM10 billion, raising the total to RM20 billion, is expected to benefit 80,000 Malaysians who may not otherwise qualify for traditional financing. These initiatives lower barriers to entry and encourage homeownership among younger households and lower-income groups.
For developers, the government has introduced a 10 percent special tax deduction, capped at RM10 million, for the conversion of commercial buildings into residential units. This incentive addresses urban supply imbalances while encouraging adaptive reuse and sustainability. In city centres such as Kuala Lumpur, Johor Bahru, and Penang, where demand patterns are shifting, this measure will help diversify supply and support urban regeneration.
Confidence is essential for both sides of the housing market. Homebuyers require assurance to plan and commit, while developers rely on consistent policy support to pursue innovation. Budget 2026 seeks to balance these needs, creating the conditions for sustainable market recovery.
Overall, Budget 2026 demonstrates maturity and discipline in economic management. Rather than pursuing rapid expansion, it focuses on rebuilding confidence with targeted initiatives. The government’s balanced fiscal approach reinforces stability while supporting the long-term resilience of the property sector. As market sentiment improves, Malaysia’s next phase of property growth will depend on the alignment of policy, planning, and market behaviour. Affordability will remain central, but stability and trust will shape the future of housing in the country.
PropertyGuru and iProperty remain committed to providing data-driven insights to support policymakers, developers, and home seekers. Together, stakeholders can ensure that today’s stability becomes the foundation for tomorrow’s growth.
admlnlx