By: Yip Wai Fong

PETALING JAYA: While the Budget 2027 measures were warmly received by development industry stakeholders, key players remained concerned over several outstanding issues as well as calling for effective implementation of the measures.

For the sector, escalating costs remain the least-addressed issue in the latest Budget. The Real Estate and Housing Developers’ Association Malaysia (Rehda) said it continues to be concerned about rising construction material, labour and regulatory compliance expenses.

“More needs to be done to ensure a more holistic change in housing affordability, such as the review of all related charges imposed by the federal and state governments, including infrastructure, utility, statutory, regulatory and compliance charges. These costs remain a challenge in developers’ efforts in addressing affordability and we reaffirm our commitment to engage with the government and all relevant parties to meet this goal,” said Rehda president Datuk Zaini Yusoff.

Master Builders Association Malaysia (MBAM) noted that raising the minimum wage (RM1,700 to RM2,000; RM2,500 for semi-skilled/graduates) for companies with annual sales above RM50mil and the requirement that companies other than SMEs pay wages through bank accounts to claim tax deductions will increase operational costs across the construction sector.

“MBAM reiterates that implementation must be accompanied by a clear price-adjustment mechanism for existing public and private contracts so that the additional burden is not simply passed on in the form of higher project and property costs,” said MBAM president Kenneth Liew Kiam Woon, adding that it acknowledges the government’s effort to address rising material costs in public contracts.

“We also welcome the government’s decision to reintroduce the Variation of Price (VOP) clause to address rising diesel and bitumen costs while advocating for its extension to other building materials,” Liew added.

MBAM, as well as Knight Frank Malaysia also urged clear implementation timelines and procurement schedules across announced public initiatives.

“While several initiatives, including e-ART (Johor’s Elevated Autonomous Rail Transit), the Lebir Dam and Klang Valley Dual Track 2, have been announced, many remain at the planning or agreement stage. We look forward to clearer implementation timelines, funding commitments and procurement schedules,” Liew said.

“Overall, Budget 2027 provides a constructive platform for the property market. The next step is to ensure timely and coordinated implementation so that these initiatives can crowd in private investment and deliver lasting value to businesses and communities,” said Knight Frank Malaysia group managing director Keith Ooi.

Housing measures well received

The industry has welcomed several measures to improve housing affordability, particularly the extension of full stamp duty exemptions for first-time homebuyers for properties priced up to RM500,000 and the new partial exemption for properties priced up to RM750,000, effective from January 2027 until 2030. Equally welcome are the stamp duty exemptions for the rehabilitation of abandoned housing projects.

“The partial stamp duty exemption for homes priced up to RM750,000 is a positive measure, particularly in major urban markets where entry prices are higher. It should reduce upfront acquisition costs and improve affordability for first-time buyers,” said CBRE WTW group managing director Tan Ka Leong.

“The full exemption for white knight developers and original purchasers of abandoned projects is equally important, as it improves the viability of project revival, reduces transaction costs and supports the target of achieving zero abandoned housing projects by 2030,” Tan added.

"Clearly, the government recognised the importance of this measure because it has extended it in two ways. It has increased the maximum price that qualifies for the exemption and the government has extended the programme out through 2030,” said Juwai IQI co-founder and group chief executive officer Kashif Ansari.

The government’s continued allocation of RM20bil in housing financing guarantees under the Housing Credit Guarantee Scheme (SJKP), though a letdown for the industry that has called for a higher allocation, was nevertheless well received alongside affordable housing initiatives such as Rumah Mesra Rakyat (RMR), Program Perumahan Rakyat (PPR), Felda housing, Bandar Madani Bukit Jalil and new projects in Kulai, Nilai, Paya Rumput and Lembah Pertang which collectively received a RM1bil allocation.

“The public housing funding can be very impactful and could create almost 13,000 homes. That’s the number you could produce if you dedicate the entire amount to the Rumah Mesra Rakyat programme and produce homes at the cost outlined in Budget 2026,” Ansari said.

“Both Rumah Mesra Rakyat and PRR are designed to provide subsidised homes to the families that most need them. They are cost-effective and have a significant impact for thousands of families. The allocation in Budget 2027 will make a big difference to families in Malaysia,” he added.

On the other hand, Rehda said measures are required to ease the sales of completed unsold residential properties.

“Rehda also hopes the government will reconsider reviving the Home Ownership Campaign (HOC), particularly to facilitate the sale of completed unsold residential properties while providing more Malaysians with opportunities to own a home,” Zaini said.

Bright spot in East Malaysia

The increased allocations for Sabah and Sarawak, particularly for infrastructure development and upgrades, were seen as an industry upside.

“The continued focus on Sabah and Sarawak, with federal allocations of RM18.7bil and RM16.2bil, respectively, in 2027, is particularly encouraging. The sustained investment in infrastructure, connectivity and regional development is expected to unlock new economic opportunities while supporting more balanced growth across the country,” said Affin Group president and group chief executive officer Datuk Wan Razly Abdullah.

“The Sibu Special Economic Zone, along with continued investment in strategic road infrastructure, enhanced regional connectivity through AirBorneo and the state’s record RM16.2bil federal allocation, serve to reinforce Sarawak’s long-term growth trajectory,” said Ooi.

“Sabah’s record RM18.7bil federal allocation, together with continued delivery of Pan Borneo Phase 1B, the Sarawak-Sabah Link Road and significant investments in electricity reliability, should strengthen connectivity, infrastructure readiness and long-term investment appeal across the state’s industrial, logistics and property sectors,” he added. 

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