The Malaysian property sector demonstrated resilience in the second quarter of 2025, with property transaction values increasing by 14% year-on-year (YoY), according to a recent report by UOB Kay Hian. Despite some companies like SP Setia, Sunway Bhd, and Lagenda falling short of expectations due to higher expenses and slower revenue recognition, the sector overall maintained a positive outlook, buoyed by strong industrial demand and significant activity in the Johor region.
The report highlighted that the property market’s transaction volume rose by 4% YoY, driven by a robust industrial segment and a notable rebound in Johor’s property transactions, which increased by 17% YoY. This growth was supported by resilient demand for industrial land and mass-market housing, alongside strong foreign direct investment inflows.
UOB Kay Hian maintained an “overweight” rating on the sector, citing a favourable interest rate environment and infrastructure developments as key drivers. The firm identified Sunway, Eco World, and Mah Sing as top picks, with Sunway’s upcoming healthcare IPO in the first quarter of 2026 expected to be particularly rewarding.
However, the sector faces challenges, including a 19% year-on-year increase in unsold completed units, although this is attributed to simultaneous project completions. The report remains optimistic, expecting the overhang to improve as the market absorbs new supply, aided by lower interest rates and demand driven by the Johor-Singapore Special Economic Zone.
Looking forward, the sector’s prospects are bolstered by anticipated government focus on affordable housing in the upcoming Budget 2026, which could further stimulate demand.
