For years, homes priced below RM300,000 have been viewed as the most affordable pathway to homeownership for many Malaysians. Yet a surprising contradiction is emerging in the property market. While affordable homes remain one of the country’s biggest needs, thousands of these houses are sitting unsold.
According to the National Property Information Centre (NAPIC), 14,201 completed residential units worth RM2.77 billion remained unsold as of the first quarter of the year, accounting for 43.3% of Malaysia’s total property overhang. Most of these unsold units are located in the Klang Valley, Johor, and Perak.
The numbers have raised an important question: If affordable homes are in demand, why are so many being left unsold?
Affordable Homes No Longer Mean Affordable Homeownership
National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong believes the issue goes far beyond the advertised selling price.
“The current overhang demonstrates that Malaysia faces not simply a ‘housing shortage’, but a shortage of well-located, financeable and genuinely affordable homes.”
He said affordability today is being redefined by the realities of modern living.
“Affordability today is not just about the purchase price. It is about the total cost of ownership, and that is where many buyers are struggling.”
A home priced at RM280,000 may appear affordable at first glance, but the actual financial commitment can be much higher. Buyers often need to account for down payments, legal fees, renovation expenses, furnishings, maintenance charges, sinking funds, parking costs, and daily commuting expenses.
When combined, these costs can place significant pressure on lower- and middle-income households already dealing with rising living costs, household debt, and stagnant wage growth.
“For lower- and middle-income households, the total cost of ownership becomes burdensome. Many households are already stretched by stagnant wage growth, rising living costs, high household debt and multiple credit commitments, which makes total home ownership cost far heavier than the sticker price suggests,” he said.
The Location Trap
Price is only one part of the equation. Location has become an equally important factor influencing purchasing decisions.
Chang pointed out that many affordable housing developments are being built in peripheral areas where land is cheaper, but access to jobs, public transport, and urban amenities remains limited.
“This has created a situation where potential buyers are increasingly choosing to rent closer to work rather than buy cheaper homes located far away but burdened by higher commuting costs and lifestyle trade-offs.”
For many Malaysians, renting near employment centres may actually be more practical than purchasing a home that requires lengthy daily commutes.
This challenge is particularly visible in areas where housing supply has grown faster than population growth and job creation.
Affordable Homes: Buyers Are Looking Beyond Price
Another factor contributing to the overhang is the growing expectation for better-quality homes.
Many affordable housing projects have faced criticism for small built-up sizes, inefficient layouts, poor design, limited parking, weak workmanship, and inadequate amenities.
As a result, buyers are becoming increasingly selective.
According to Chang, consumers today are no longer making decisions based purely on affordability. Instead, they are evaluating whether a property offers sufficient value, comfort, convenience, and long-term liveability.
Malaysia’s Affordable Homes Paradox
Olive Tree Property Consultants founder and chief executive officer Samuel Tan described the situation as an “affordable housing paradox.”
Despite large numbers of homes being built for the mass market, many remain out of reach in practical, financial, and lifestyle terms.
Tan said the data shows that Malaysia’s housing challenge is no longer simply about building more homes. Instead, the focus should be on ensuring homes are financeable, strategically located, and genuinely liveable.
He added that demand is increasingly shifting towards developments that offer stronger connectivity, better infrastructure, and higher overall quality.
Developers Face Rising Pressures Too
Real Estate and Housing Developers’ Association (REHDA) Malaysia president Datuk Ho Hon Sang acknowledged that the number of unsold completed units is a concern, especially when they fall within the affordable housing category.
“With that in mind, a high number of unsold but completed units is not something to turn a blind eye to, especially when it comes to units that are deemed to be affordably priced.”
According to Ho, land costs remain one of the biggest obstacles to delivering affordable homes in locations where demand is strongest.
“Land cost in urban areas pushes home prices in the open market upwards, thus rendering it unaffordable for many in the middle-income group. Even when the price of the unit is deemed reasonable by the purchaser, they will still need to consider if the house and the location have everything they need.”
Why Some Malaysians Are Choosing Not to Buy
Financing remains another major hurdle. Many aspiring homeowners continue to struggle with bank loan approvals despite wanting to purchase a property.
At the same time, lifestyle preferences among younger Malaysians appear to be changing.
“Younger Malaysians may be less inclined to commit to long-term mortgage obligations in an increasingly uncertain economic environment,” he said.
Economic uncertainty, changing career patterns, and a desire for greater flexibility are influencing how younger generations view homeownership.
The latest figures suggest Malaysia’s housing challenge is no longer simply about building affordable homes.
The deeper issue is whether these homes are located where people want to live, connected to where people work, and affordable when all ownership costs are taken into account.
The existence of 14,201 unsold affordable homes worth RM2.77 billion suggests that affordability today is no longer determined by the selling price alone.
Perhaps Malaysia does not have a shortage of affordable homes at all.
It has a shortage of homes that are affordable in both price and everyday living costs.
Source: here
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