Johor — a top regional hotspot

It appears to be a foregone conclusion that Malaysia’s property sector has shifted its eyes southward and the spotlight is decisively on the state that is closest to Singapore.

Johor, fuelled by unprecedented governmental focus – namely the establishment of the Johor-Singapore Special Economic Zone (JS-SEZ) and the imminent completion of the Rapid Transit System (RTS) Link – has emerged as the undisputed top regional hotspot for transaction activity, price appreciation and investment potential heading into 2026.

This dynamic environment is not characterised by speculative bubbles but by the convergence of economic policy and critical infrastructure, setting Johor on a trajectory to significantly outperform the national average.

The success story of 2025 is the market’s capability to not just remain healthy but to channel that health into an accelerated growth corridor near the Malaysian-Singapore border, attracting both domestic upgraders and substantial foreign investment.

It looks certain that next year is widely predicted to be dominated by the state’s continued integration with the Singaporean economy, providing a clear path for sustained property value gains in the southern corridor.

Providing context for this regional boom is the general state of the Malaysian market, which, according to Juwai IQI co-founder and group chief executive officer Kashif Ansari, is fundamentally healthy, optimistically pointing out Johor’s successful navigation of various headwinds.

Sufficient demand

Moreover, the Malaysian market has been healthy this year with a surge in completed new homes and enough stable demand to absorb many of those properties, Ansari stated, setting the baseline for the overall economy which is also a factor for Johor’s rise as a regional hotspot.

This stability is underpinned by careful monetary management. “One reason for steadily climbing prices is that interest rates have been supportive.

“Bank Negara Malaysia kept the rates stable for a prolonged period and only this year cut them for the first time since May 2020. The OPR (overnight policy rate) is now 2.75%, which is supportive but high enough to prevent inflation,” he said.

The market’s capacity to absorb supply without deflationary pressure is a testament to its underlying strength. This strength, ironically, was tested by the completion of pandemic-delayed projects.

“We saw a surge in completed units this year. Projects that had been delayed since the pandemic are now being delivered,” Ansari said.

He quantified the scale of this delivery wave: “Developers are on track to complete 23.4% more new homes this year than in 2024, yet the market has successfully absorbed much of this wave of completions.”

This absorption is crucial, leading to a marked improvement in market balance, evidenced by a key metric: “The overhang in serviced apartments in the 3Q (third quarter) was 11% lower than a year earlier.”

Prudent planning crucial

Simultaneously, developers have been prudent about future planning, a strategy that bodes well for further price stability and appreciation, particularly in high-demand areas like Johor.

“Developers are taking a cautious approach to planning new launches for 2026 and 2027. The number of new home construction starts is down 2% and the number of new homes on the drawing board that haven’t yet reached the construction stage is down by nearly 18%,” Ansari noted.

This calculated reduction in supply will intensify competition for properties in premier locations. This caution should further improve the market’s health and could push prices up, with real estate investors standing to reap the rewards.

The national price data also confirmed a positive trajectory, providing further confidence for targeted regional investment.

“The Home Price Index jumped by 3.5% in the 1Q, and in fact, prices have not fallen on an annual basis since at least 2021,” he noted. “Given the huge events that have changed the global outlook since the onset of Covid, Malaysian residential prices have been remarkably steady.”

However, while the national figures are stable, Johor’s performance has been exceptional, establishing it as the frontrunner. “The strongest state looks to be Johor, which is benefitting from the special economic zone and infrastructure investments,” Ansari stated.

The data validating this claim is compelling. In the first half of the year, homebuyers bought 13% more homes in Johor and Johor prices jumped by 5.7% from a year earlier.

This 5.7% price appreciation significantly outpaces the national average and positions Johor as the premier investment corridor in the country.

“Johor benefits from higher cross-border investment from Singapore, which has been stimulated by the JS-SEZ and the new transit investments, especially the RTS Link,” Ansari explained.

The JS-SEZ is not merely a policy – it is a massive economic stimulus expected to reshape the GDP contribution of the southern region. “We estimate the JS-SEZ could add as much as RM19.8bil to Malaysia’s GDP (gross domestic product) within 10 years, with much of that being concentrated within Johor itself,” he said.

This economic injection translates directly into job creation, high-value businesses and, consequently, demand for housing.

Furthermore, the imminent opening of the RTS Link will physically and economically integrate Johor Baru with Singapore’s transit network. This connection will be a game-changer for property valuations in the state.

“Johor’s market will only get stronger after RTS Link opens. When residents of Singapore see how easy it will be to travel across the border, it will be hard for them not to embrace the more enjoyable and affordable lifestyle that’s on offer in Johor,” Ansari predicted.

Younger demographic

Looking ahead, the demographic drivers of the property market are perfectly aligned to reinforce Johor’s status as a hotspot. The market is supported by a large, young population.

“Remember that more than one out of every four Malaysians is no older than 29 and probably still yet to buy their first home or investment property. Another quarter of the country is aged between 30 and 44, which again are prime property-buying years,” Ansari highlighted.

As this demographic enters their prime earning and buying years, they will naturally gravitate towards economic opportunity.

The JS-SEZ, being the most significant source of new, high-value employment in the region, will be a powerful magnet, directing purchasing power toward Johor.

“(On the whole), our base case for 2026 is slightly faster home price growth, in the 2% to 4% range,” he stated.

Critically, he advised investors to look locally: “Johor will be a hotspot, in particular within reach of the RTS Link and selected Klang Valley MRT (mass rapid transit)/LRT (light rail transit) zones. Prices near these infrastructure projects could run ahead of the national average.”

This suggests that the 5.7% growth seen in Johor is likely just the beginning, with key corridors continuing to generate double-digit returns.

The core conclusion remains steadfast: Johor is the investment destination of choice for the immediate future.

“Our outlook is positive, so if we had to imagine a negative risk factor, it would have to be an unexpected economic shock. Something significant enough to hurt jobs, confidence and credit conditions.

“We don’t foresee such an outcome and our central expectation is for steady demand, manageable supply and improving infrastructure.

“The year 2026 looks bright from the real estate perspective and Johor is leading the way,” Ansari said.