Rehda calls for compliance cost review to ease Malaysia’s housing affordability crisis

KUALA LUMPUR, WISMA REHDA, 23 SEPTEMBER 2026 —

Statutory costs inflating home prices are under scrutiny from the Real Estate and Housing Developers’ Association Malaysia (Rehda), which today urged a review of outdated compliance expenses as a key lever to improve housing affordability.

Datuk Zaini Yusoff, Rehda president, said in a media briefing launching the Rehda Property Industry Survey 1H2026 and Market Outlook for 2H2026 and 1H2027 that regulatory and statutory fees—many potentially obsolete—directly contribute to higher home prices. “These costs must be reassessed to ensure they remain necessary and proportionate,” he said, adding that affordability depends not just on price but also on financing access and production costs.

The call comes as developers face mounting pressures. Construction costs rose 13% on average between March and June, driven by surging fuel prices and geopolitical instability, according to the survey. 81% of respondents reported higher business costs, with 35% citing increases of 3%–6%, while 63% faced construction challenges—primarily from material shortages and labour constraints.

Developer launches to shrink by 63% in 2H2026 Only 18,696 units, mostly strata properties priced between RM300,001–RM500,000, are planned for launch in the second half of the year, a 63% drop from earlier expectations. Pahang, Melaka, Negeri Sembilan, and Kedah will host the bulk of these projects, with developers citing weak demand, approval delays, and high unsold inventory as key hurdles.

Cost pressures force hiring freeze, benefit cuts To manage expenses, 63% of developers plan to maintain a hiring freeze from July 2026–June 2027, while others have already adjusted employee benefits or implemented retrenchments. Despite the caution, 56% intend to expand land holdings, suggesting a strategic shift toward long-term inventory management rather than immediate sales.

Market sentiment turns cautiously optimistic for 1H2027 While developers remain pessimistic about near-term conditions—63% have no launch plans—sentiment improved slightly for early 2027, with respondents adopting a neutral-to-optimistic outlook. Zaini stressed the need for collaboration between government, banks, and developers to ensure financially capable Malaysians can access homeownership amid persistent economic uncertainty.

Regional impact: Affordability crisis deepens in key states The survey highlights a regional disparity in housing pressures, with Klang Valley, Johor, and Penang—traditionally strong markets—seeing slower launches due to high unsold stock. In contrast, Pahang and Melaka remain focal points for mid-market developments (RM300,001–RM500,000), reflecting a shift toward more affordable segments as buyers retreat from premium pricing.

Policy watch: Compliance costs in the crosshairs Rehda’s push to review statutory fees aligns with broader industry calls for regulatory relief. If implemented, reductions in compliance costs could lower home prices by 3%–8%, depending on the scope of reforms, according to preliminary estimates from the association. However, progress hinges on Bank Negara Malaysia and the Ministry of Housing and Local Government, which have yet to signal concrete actions.

Outlook: Developers brace for slower growth, eye 2027 rebound With only 37% of developers planning launches in 2H2026, the market is bracing for a near-term slowdown. Yet the 56% land-bank expansion signals confidence in a 2027 recovery, provided cost pressures ease and financing conditions improve. For now, affordability remains the defining challenge—one that Rehda’s compliance cost review aims to address before the sector’s outlook stabilises.

Related: Real Estate and Housing Developers’ Association Malaysia (Rehda) · Datuk Zaini Yusoff