Budget 2027 expected to support home sales

PETALING JAYA: Budget 2027 may provide support for property stocks, although measures to boost homeownership may not be enough to significantly reduce Malaysia’s property overhang.

An analyst told StarBiz the impact on property stocks would likely be “modest”, as most of the measures had been anticipated by the market.

The stamp duty exemptions for first-time home buyers should improve take-up, particularly for properties priced between RM500,000 and RM750,000, but are unlikely to materially reduce the overall overhang.

“While stamp duty savings are helpful, affordability, financing constraints and supply-demand mismatches remain key challenges,” the analyst said.

Under Budget 2027, the full stamp duty exemption for first-time home buyers purchasing residential properties priced up to RM500,000 has been extended.

Newly introduced is a partial exemption for properties priced between RM500,001 and RM750,000, with first-time buyers receiving a full exemption on the first RM500,000 and a 50% exemption on the remaining amount.

The exemptions will apply to sale and purchase agreements signed from Jan 1, 2027, to Dec 31, 2030.

Full stamp duty exemptions will also be extended to rescuing developers or contractors and original purchasers of abandoned housing projects over the same period.

The government is also continuing the RM20bil Housing Credit Guarantee Scheme (SJKP), which is expected to benefit about 80,000 first-time home buyers, particularly those with irregular incomes.

The measures come as Malaysia continues to grapple with a sizeable stock of unsold properties.

In the first half of 2026, the residential property overhang stood at 33,094 completed unsold units worth RM17.78bil, according to the National Property Information Centre.

About 37.3% of these units were priced at RM300,000 and below, while 27.6% were priced between RM300,001 and RM500,000.

Another 25.6% were priced between RM500,001 and RM1mil, while the remaining 9.5% were above RM1mil.

Additionally, there were also 23,375 completed unsold serviced apartment units worth RM19.33bil, with more than 55% priced between RM500,001 and RM1mil.

CIMB Research described Budget 2027 as “mildly positive” for the property sector, with expanded stamp duty exemptions and the continuation of SJKP which are expected to provide some support for housing demand.

“Budget 2027 continues to address key barriers to home ownership by improving access to financing and reducing upfront transaction costs for first-time home buyers. Nonetheless, residential buyer sentiment may be tempered by a challenging macro backdrop,” it said.

As such, the research house maintained its “neutral” rating on the property sector.

Beyond measures aimed at homebuyers, Budget 2027 also provides further support for affordable housing.

About RM1bil has been allocated for Program Residensi Rakyat and Rumah Mesra Rakyat, while government-linked companies have also been brought in to support affordable housing development.

In Kuala Lumpur, 50 acres have been gazetted as Malay Reserve Land, with Petroliam Nasional Bhd earmarking 10 acres for affordable housing.

Another 50 acres of land valued at RM1bil has been endowed to Yayasan Pelaburan Bumiputra for Permodalan Nasional Bhd to develop affordable housing and advance bumiputra economic interests.

Under the Rumah Madani initiative, at least 2,500 units are planned in Belfield, Kuala Lumpur, with 70% allocated to bumiputra buyers.

The RM4bil Bandar Madani Bukit Jalil project, spearheaded by Putrajaya Holdings Sdn Bhd, is also targeted to deliver up to 10,000 homes.

Meanwhile, CIMB Research expects infrastructure spending to support demand for selected residential, commercial and industrial properties.

It also said the planned rollout of the Elevated Autonomous Rapid Transit system and improved connectivity ahead of the Johor Bahru-Singapore Rapid Transit System Link could support demand for nearby residential and commercial developments.

The research house also expects infrastructure projects supporting Malaysia Vision Valley 2.0 in Negri Sembilan to improve connectivity to industrial parks.

These include a proposed road connecting Kuala Lumpur International Airport to Bandar Enstek, the upgrading of Jalan Pajam-Nilai-Salak and the continuation of the Klang Valley Double Track 2 project.

CIMB Research said the projects could benefit industrial developments including Eco World Development Group Bhd’s Eco Business Park VII, Matrix Concepts Holdings Bhd’s MVV TechValley and Sime Darby Property Bhd’s Vision Business Park.

The research house added that the planned rollout of the Johor-Singapore Special Economic Zone blueprint by end-2026 could provide another catalyst for Johor-focused developers.

It continues to favour UEM Sunrise Bhd as its preferred proxy for potential land value appreciation in Johor, while also highlighting EcoWorld for its strong sales traction and expanding industrial development pipeline.