This article first appeared in City & Country, The Edge Malaysia Weekly on April 20, 2026 - April 26, 2026

In the fourth quarter of 2025 (4Q2025), the residential market in Greater Kuala Lumpur showed cautious resilience, continuing the momentum observed in 3Q2025, according to Savills Malaysia director of research and consultancy Fong Kean Hwa.

Presenting The Edge Malaysia | Savills Klang Valley Residential Property Monitor 4Q2025, Fong says housing demand during the quarter under review remained focused on the affordable housing and transit-oriented development (TOD) segments, supported by policy measures that enhanced liquidity and loan accessibility for buyers.

Full-year data from the National Property Information Centre (Napic) indicated that the central region, encompassing Selangor, Kuala Lumpur and Putrajaya, recorded a total of 99,437 property transactions valued at RM107.09 billion. Transaction volume slipped marginally by 0.4% year on year (y-o-y), while total value increased by 3.7%, indicating a market shift towards higher-value or better-located assets despite slightly softer activity levels.

Fong highlights that the residential sector remained the leading contributor, accounting for 68.7% of transactions in the central region. A total of 68,279 units were transacted, representing a 2.9% decrease in volume from the previous year, while transaction value rose 4.4% to RM46.09 billion.

“This trend indicates that buyers continued to prioritise quality, location and long-term value, supported by improving market sentiment in the second half of 2025, where policy support and financing innovations helped cushion the softness of earlier market fluctuations,” he notes.

In 4Q2025, Bank Negara Malaysia announced the decision to keep the Overnight Policy Rate (OPR) at 2.75% after its final year-end meeting, which helped maintain borrowing stability. This positive environment eased repayment pressures and enhanced purchasing power, especially for first-time homebuyers.

In addition, Selangor announced a new local authority assessment tax rebate for eco-friendly home installations, which is set to take effect in 2026. The rebate offers up to 100% tax relief for qualifying installations, such as solar panels, electric vehicle chargers and rainwater harvesting systems.

“This will make energy-efficient homes more attractive and encourage developers to include green features in their residential schemes,” says Fong.

While housing affordability and loan accessibility remain key factors influencing market performance, the government addressed some of these issues by announcing relevant measures during Budget 2026 tabled in October 2025, such as the Housing Credit Guarantee Scheme (SJKP) expansion to about RM40 billion improved loan coverage for first-time buyers, gig workers and self-employed individuals, easing lender risks and boosting approvals in the affordable and mid-market segments.

Full stamp duty exemptions for first-time buyers on properties up to RM500,000 have been extended until end-2027, lowering upfront costs and sustaining demand in entry-level launches, where most activity is concentrated.

“Collectively, these Budget 2026 measures aim to help mitigate challenges such as selective lending, affordability pressures in certain segments — such as loan rejections for B20 and M40 homebuyers on properties priced between RM300,000 and RM500,000 — and the persistent overhang,” Fong says.

Meanwhile, data on foreign residential purchases released during the quarter also showed strong growth, with national volume rising 83.5% to 2,676 units and value increasing 92.1% to RM5.867 billion (average price per unit rose 4.7% to RM2.192 million) in 2025. Kuala Lumpur led the central region, with volume doubling to 1,480 units and value rising 100.2% to RM3.905 billion, followed by Johor (value up 66.8%) and Selangor (value up 128.3%). Fong believes the long-term outlook remains positive, despite the rise in the 4% stamp duty for foreign purchasers to 8% on Jan 1, 2026.

“Barring unforeseen circumstances, the momentum of 2025 has paved the way for continued progress into 2026. With catalysts such as the anticipated mid-2026 launch of LRT3 and the ongoing incentives announced in Budget 2026, demand in affordability-focused, TOD and sustainable segments is expected to rise further, sustaining the positive trend observed since mid-2025 and addressing structural gaps to support broader market stability,” Fong says.

According to Savills’ data, Kuala Lumpur residential housing market activity showed particular strength in 2025, with transactions rising 8.7% y-o-y to 21,635 units and values surging 36.6% to RM23.81 billion.

“This uptick highlighted renewed interest in prime and established locations, where buyers prioritised location, amenities, connectivity and long-term value,” Fong says.

Savills’ market tracking shows that demand for high-rise properties in prime locations remains strong, with Bangsar and Mont’Kiara recording healthier price and rental growth than in 2024. In 4Q2025, average transaction prices rose 0.7%, 3.4% and 6.2% y-o-y in KLCC, Bangsar and Mont’Kiara, reaching RM1.48 million, RM1.01 million and RM860,000, respectively, for 2-bedroom, high-rise units.

Rental rates also posted growth across KLCC, Bangsar and Mont’Kiara, rising 7.5%, 7.6% and 6.3% y-o-y respectively. Mont’Kiara continues to offer comparatively stronger rental yields.

“The Mont’Kiara high-rise residential segment is expected to remain resilient, driven by continued demand from expatriates and high-net-worth individuals, with the expected completion of Solasta Dutamas in 4Q2026 further reinforcing market confidence,” Fong says.

He also points out that Kuala Lumpur remains a key development hotspot, with real estate activity continuing to thrive across several areas. Notable developments in 4Q2025 include MGB Bhd’s (KL:MGB) clinching a contract worth RM118.5 million from UDA Accord Development Sdn Bhd to construct Residensi Wilayah Fasa 2, a 45-storey, 702-unit residential development in Jalan Jubilee in Kuala Lumpur; Nestcon Bhd’s (KL:NESTCON) bagging a contract worth of RM355 million to build two 57-storey serviced apartment blocks in Taman Wahyu, Kuala Lumpur; and Malaysia Land Properties Sdn Bhd’s (Mayland) plans for high-rise condominium launches in Kuala Lumpur commencing in 4Q2025 as part of the company’s RM1.15 billion residential launch programme comprising multiple KL projects.

On the other hand, the 2-storey terraced house market in key areas of Kuala Lumpur, such as TTDI (Taman Tun Dr Ismail), OUG, Bangsar’s Lucky Garden and Cheras’ Taman Midah, showed positive price appreciation trends in 4Q2025.

In TTDI, transaction prices rose 6.3% y-o-y to RM1.7 million, while rental rates rose 3.1% y-o-y to RM3,300 per month, yielding a quarterly return of 2.3%. Lucky Garden in Bangsar saw a 6.1% y-o-y increase in price to RM1.75 million, while rental rates increased to RM3,300 per month, with a rental yield of 2.3%.

OUG prices climbed to RM900,000, and rental rates remained at RM2,100 per month, resulting in a rental yield of 2.8%. Cheras’ Taman Midah saw a price increase to RM800,000, while rental rates increased 2.7% y-o-y, reaching RM1,900 per month, yielding 2.9% return.

Meanwhile, the number of overhang units in Kuala Lumpur — including unsold completed residential, serviced apartment, and Small Office Home Office (SoHo) units — declined modestly from 9,081 in 2024 to 7,143 in 2025. This was partly due to residential completions remaining relatively subdued, with 16,394 units completed in 2025, down 16.5% from 2024. “The slower pace of completion has helped ease the accumulation of overhang units in the short term. However, the sizeable pipeline of upcoming high-rise developments suggests that competitive pressures in the residential market are likely to persist over the coming years,” says Fong.

While Selangor continues to dominate residential market activity in the central region, the number of residential transactions fell 5.6% y-o-y to 57,293 units in 2025, and total transaction value fell 3.9% to RM32.65 billion.

Overhang performance, on the other hand, was mixed throughout the year, with the number of unsold completed units declining slightly to 5,203 units, but ultimately ending higher around 6,220 units in 2025.

“Notably, 24.7% of these overhang units were priced between RM500,001 and RM600,000, indicating a concentration in the upper mid-range price bracket. It suggests that pricing and locational factors continue to influence demand and absorption in this segment,” Fong notes.

Nonetheless, the high-rise residential market in Selangor remained resilient in 4Q2025, with steady growth in prices and rentals. Areas such as Bandar Sunway, Subang Jaya and Shah Alam experienced moderate increases, supporting stable rental yields.

The average transaction price in Bandar Sunway climbed 3.5% y-o-y to RM890,000 in 4Q2025, while monthly rental rates remained unchanged at RM3,750, delivering a rental yield of 5.1%.

Subang Jaya’s average transaction price increased to RM770,000, with a monthly rent rise to RM3,100 y-o-y, yielding a 4.8% return quarterly.

Prices in Petaling Jaya recorded a growth of 1.7% y-o-y, with transaction values averaging RM1.08 million. Rental rates rose 7.2% y-o-y to RM3,700 per month, resulting in an annual yield of 4.1%.

In Shah Alam, prices increased to RM770,000 while rents increased to 2,900 per month, delivering a 4.5% rental yield.

Real estate activities recorded in Selangor in the quarter include Berjaya Property Bhd’s (KL:BPROP) official launch of Bayu Timur Residences in Kota Kemuning, Shah Alam; and OSK Property Holdings Bhd’s report of strong demand for the Bayu @ OSK Mori Park integrated development in Section 13, Shah Alam, where roughly 70 % of serviced apartment units were snapped up within the first five months and earlier phases recorded up to 90 % take-up.

In the 2-storey terraced house segment, Selangor showed varied performance, with stable transaction prices in areas such as Putra Heights and Bandar Bukit Raja in 4Q2025. In Putra Heights, prices remained around RM740,000, while rents rose 2.8% y-o-y to RM1,850 per month, translating into a gross annual rental yield of 3%. In Bandar Bukit Raja, prices remained at RM650,000 in 4Q2025, and rental demand remained strong, with rates remaining at RM1,700 per month, resulting in a 3.1% yield.

In SS2, Petaling Jaya, the price of 2-storey terraced houses continued to rise, recording an increase of 8% y-o-y to RM1.08 million, while rental rates remained unchanged y-o-y at RM2,150 per month, yielding a return of 2.4%.

Bandar Utama also saw a steady price increase of 7.7% y-o-y, reaching RM1.4 million, while rental rates rose to RM2,800 per month, or a 2.4% rental yield.

Meanwhile, Selangor’s semi-detached housing market registered positive growth in 4Q2025, with prices increasing in most key locations. Rental yields held steady at 1.9% to 3.8%.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.