By FMT Reporters

PETALING JAYA: The 2026 budget is expected to strengthen Malaysia’s property market through targeted subsidies, major infrastructure investments, and initiatives under the 13th Malaysia Plan, says real estate firm Juwai IQI.

Juwai IQI co-founder and group chief executive Kashif Ansari said the measures in the Oct 10 budget would likely create more affordable housing options while boosting demand for luxury properties among inbound tourists and expatriates.

“IQI believes the budget could increase residential transaction volumes by 3% to 5% in 2026 compared with full-year 2025 levels. First-home buyers and those in the lower mid-market price segment are expected to lead this growth,” he said in a statement.

Kashif said the key driver behind the uptick would be the RM15 billion allocated for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) cash assistance, which will help families afford larger homes.

He noted that 2026 would be the first full year households would benefit from the expanded RM15 billion STR/SARA allocation.

“For a family earning about RM3,000 monthly, the affordable house price – based on keeping mortgage payments below 30% of annual income – would rise from RM209,000 to about RM279,000 with an extra RM300 per month from STR/SARA,” he claimed.

A better-off family earning around RM4,850 a month could also stretch their budget, with the affordable house price increasing from roughly RM339,000 to over RM408,000. This, he said, aligned with many of the new affordable housing options planned for urban areas.

Borrowing costs are also lower after Bank Negara Malaysia cut the overnight policy rate (OPR) by 25 basis points to 2.75% in July – the first time the OPR has dropped below 3% since March 2023.

The budget also provides step-up financing for households without fixed income documentation, facilitated by Syarikat Jaminan Kredit Perumahan Bhd, the government-owned mortgage guarantee company. This scheme, first announced in Budget 2025, is expected to continue in 2026, Kashif said.

Looking ahead, Kashif expects transaction volumes to pick up in the second half of 2025 and into 2026, supported by major infrastructure projects such as the Johor Bahru–Singapore Rapid Transit System Link, the Johor–Singapore special economic zone, and the Mass Rapid Transit 3 (MRT3). These developments are set to drive both housing demand and new construction.

“The market is healthy and resilient, supported by high employment and strong economic growth,” he said, citing data from the first half of 2025 that showed property values rising by 1.9%, even as transaction volumes slipped 1.3%.

Malaysia’s property market reached a decade-high in 2024, recording 420,525 transactions worth RM232.3 billion, Kashif noted.