Property players look beyond homeownership in Budget 2027 wish list

MALAYSIA, 6 OCTOBER 2026 —

Malaysia’s Property Sector Calls for Budget 2027 Overhaul: Beyond Homeownership to Urban Resilience and Sustainability

While developers, consultants, and industry bodies continue to advocate for measures supporting first-time buyers and affordability, they are increasingly urging fiscal policies that address rising development costs, fragmented infrastructure planning, and climate risks—challenges that threaten the sector’s long-term viability.

The call reflects a growing recognition that Malaysia’s rapid urbanisation—with 77% of its population living in cities as of 2024—demands a more integrated approach to development. Industry leaders argue that Budget 2027 must align housing, transport, and infrastructure planning to create liveable, low-carbon cities, while also incentivising developers to adopt measurable sustainability and climate-resilient designs.

The push comes as Malaysia grapples with soaring construction costs, regulatory inefficiencies, and the economic toll of climate-related disasters, such as the RM636.9 million in flood damages recorded in 2025, with public infrastructure bearing the brunt of losses at RM380.2 million nationwide.

A Shift from Homeownership to Holistic Urban Development While Budget 2026 introduced targeted measures to boost homeownership—such as expanded stamp duty exemptions and financing assistance—the property sector now insists that affordability cannot be achieved in isolation. Affordability, industry players argue, is shaped by the entire development ecosystem: from regulatory hurdles and compliance costs to infrastructure readiness, construction expenses, and access to financing.

Without addressing these systemic pressures, even the most generous homebuyer incentives risk becoming unsustainable.

Gamuda Land, one of Malaysia’s largest developers, highlights how fragmented planning undermines long-term urban viability. "Across our Malaysian townships, we see how improved connectivity and the progressive introduction of commercial and community infrastructure support township maturation," a company representative noted. "Stronger alignment between infrastructure planning and development from the outset would reduce costly retrofits later and create more connected, efficient urban areas."

The sector is particularly vocal about the need for outcome-based sustainability policies, moving beyond individual green building certifications to evaluate entire precincts on metrics like water resilience, biodiversity, carbon reduction, and low-carbon mobility. Malaysia already has frameworks supporting sustainable development, but industry players say Budget 2027 must strengthen incentives for developers to demonstrate measurable resilience outcomes—such as flood mitigation through blue-green infrastructure or climate-adaptive design—rather than treating sustainability as an afterthought.

Key Demands: From Affordable Housing to Ageing Populations The property industry’s wish list for Budget 2027 spans five major policy areas, each designed to address structural inefficiencies while future-proofing Malaysia’s urban growth:

1. Expanding the Investment Tax Allowance (ITA) for Green Retrofits To accelerate decarbonisation, developers and consultants propose extending the ITA to cover property upgrades in existing buildings, encouraging owners to adopt energy-efficient and sustainable technologies. They also recommend tiered tax rebates for green building certifications, paired with a "perform-to-earn" grant system that rewards verified energy and water savings over time.

2. A Centralised Affordable Housing Fund Fragmented affordable housing supply has long plagued Malaysia’s property market. Industry players advocate for a Collaborative Affordable Housing Fund, financed by developer contributions, to construct high-quality, consolidated affordable homes in transit-oriented locations with direct access to public transport, jobs, and amenities. This would address the persistent supply-demand mismatch in urban areas.

3. Fiscal Incentives for Transit-Oriented Development (TOD) To reduce car dependency and lower urban sprawl, the sector is pushing for grants to local authorities that incentivise reducing minimum car park requirements in TODs. Additional proposals include shared parking incentives and co-funding for pedestrian sidewalks and bicycle lanes, aiming to create walkable, low-carbon cities.

4. Reintroducing a Refreshed Home Ownership Campaign (HOC) for Completed Stock While the HOC has historically focused on unsold properties, industry players urge its revival to target completed stock, stabilising the market and generating downstream economic benefits. Mah Sing Group Bhd, one of Malaysia’s largest property developers, supports this, noting that demand remains resilient but financing access remains a key barrier.

5. Support for Senior Living Infrastructure With Malaysia’s ageing population, the sector calls for grants, tax deductions, or targeted incentives for purpose-built senior living facilities. These would provide retirees with high-quality, fully serviced accommodations, easing the transition from traditional housing.

Mah Sing’s Five-Point Blueprint for Budget 2027 Mah Sing Group Bhd has outlined five specific policy recommendations to guide Budget 2027:

- Sustained Homeownership Support: Continuation of stamp duty exemptions for first-time buyers and a refreshed HOC with cost savings aligned to current market conditions. - Expanded Financing Eligibility: Raising the Housing Credit Guarantee Scheme (SJKP) threshold from RM500,000 to RM600,000 for homes in high-cost urban areas, particularly in the Klang Valley, to reflect rising property prices.

- Streamlining Compliance Costs: Reducing unnecessary regulatory burdens without compromising governance standards to lower development costs and accelerate project completion. - Green Building Incentives: Enhancing tax breaks and financing support for energy-efficient technologies and sustainable certifications to offset higher upfront costs. - Infrastructure-Led Development: Encouraging public-private coordination in planning to ensure seamless integration of housing, transport, and utilities from the earliest stages of development.

The Cost of Inaction: Rising Development Pressures The property sector’s urgency stems from mounting challenges: - Construction Cost Inflation: The expanded Sales and Service Tax (SST) on construction services has added financial strain, while compliance-related costs further eat into margins. - Climate Vulnerability: Malaysia’s RM636.9 million in flood-related losses in 2025—with public infrastructure accounting for RM380.2 million—underscores the need for climate-resilient urban planning.

- Financing Barriers: Despite resilient demand, many Malaysians struggle with homeownership due to high loan-to-value ratios and stringent eligibility criteria, particularly in urban centres.

Regional Context: Malaysia’s Property Sector in a Shifting Southeast Asian Landscape Malaysia’s property challenges mirror broader trends in Southeast Asia, where urbanisation, climate risks, and affordability crises are reshaping government-industry relations. Singapore, for instance, has long prioritised transit-oriented development and green building mandates, while Indonesia’s housing backlog has led to state-led affordable housing initiatives. Thailand, too, has introduced stamp duty exemptions and financing subsidies to revive its cooling property market.

Yet Malaysia’s approach remains distinct in its emphasis on private-sector-led sustainability and public-private coordination. If Budget 2027 delivers on the industry’s calls, it could position Malaysia as a regional leader in integrated, resilient urban development—one where fiscal policies not only support homeownership but also future-proof cities against economic and environmental shocks.

The Road Ahead: What to Watch in Budget 2027 As Finance Minister Datuk Seri Anwar Ibrahim prepares to table Budget 2027 on October 9, all eyes will be on whether the government adopts the property sector’s push for structural reforms over short-term fixes. Key indicators of success will include: - The introduction of a Collaborative Affordable Housing Fund, addressing the fragmented supply of low-cost homes.

- Expanded tax incentives for green retrofits and sustainable certifications, accelerating Malaysia’s net-zero transition. - Grants for transit-oriented development, reducing car dependency and lowering urban sprawl. - A refreshed HOC targeting completed stock, stabilising the market and boosting economic activity. - Dedicated support for senior living infrastructure, catering to Malaysia’s ageing population.

The property sector’s message is clear: Budget 2027 must do more than prop up homeownership—it must rebuild Malaysia’s urban future on resilience, sustainability, and efficiency. Whether the government heeds this call will determine not just the health of the property market, but the livability of Malaysia’s cities for decades to come.

Related: Mah Sing Group Bhd · Datuk Seri Anwar Ibrahim · Malaysia