Malaysia property loan applications rise 2.6% but approvals slip 0.6% in first nine months of 2026
Malaysia's property loan applications rebounded 12.6% year-on-year in September, but cumulative approvals for the first nine months of 2026 fell 0.6% to RM211.2 billion. MBSB Research expects developers' earnings growth to remain selective amid elevated costs and cautious homebuyer sentiment, while
PETALING JAYA (Nov 5): Malaysia's property loan applications rebounded in September, but cumulative approvals remained marginally below last year's level, with MBSB Research expecting developers' earnings growth to remain selective amid elevated costs and cautious homebuyer sentiment.
In a sector report on Tuesday (Nov 3), the research house said applications for property purchases rose 2.6% year-on-year to RM502.7 billion in the first nine months of 2026, while approved loans declined 0.6% to RM211.2 billion. September applications increased 12.6% from a year earlier, reversing August's 4% decline, while approvals rose 7.2% after falling 13.3% in the preceding month.
MBSB said the applications rebound suggested demand could be stabilising. However, the marginal decline in cumulative approvals could indicate a more challenging sales environment ahead for developers. The research house maintained its "neutral" recommendation on the sector, saying buying sentiment remained relatively stable despite consumers' caution in a higher-cost environment.
Separately, the Housing and Local Government Ministry has identified a mismatch between supply and demand as a principal cause of completed homes remaining unsold. In a written parliamentary reply reported by RTM on Thursday (Nov 5), the ministry said housing developments did not always meet local needs in terms of quantity, quality and prices relative to incomes. It said the National Housing Policy 2026–2035 emphasises more targeted, data-led planning that considers household affordability and demand by locality.
RTM also reported that completed unsold homes numbered 33,094 in the second quarter, an increase of 293 units, or 0.9%, from the preceding quarter. The same residential stock count, valued at RM17.78 billion, was presented by Finance Minister II Datuk Seri Amir Hamzah Azizan when launching the first-half property market report in September. This compared with 30,471 units worth RM17.73 billion at end-2025. Amir Hamzah said unsold housing was also evident in the affordable and mid-priced segments. He urged developers and local authorities to use National Property Information Centre data to assess demand in specific locations before launching projects.
MBSB expects no major earnings surprises from developers' results for the third quarter of calendar year 2026, following a mixed performance in the preceding quarter. Some companies' stronger second-quarter profitability was largely supported by one-off gains, including land disposals, while others faced margin pressure and operational challenges. The research house said there was no clear trend of broad-based earnings growth from underlying operations. Developers with suitable products and well-located projects should continue to attract demand, but elevated costs could weigh on margins and homebuyer affordability.
According to the Nov 3 note, the KL Property Index fell 4.1% in October, compared with the KLCI's 2.2% decline. For the year to date covered by the report, the property index had declined 7.9%, against a 3.8% fall in the benchmark. The property index was trading at 0.6 times book value, below its long-term mean of 0.66 times. MBSB considered the discount justified by the muted earnings outlook and lack of strong near-term catalysts.
