By Kashif Ansari, Co-Founder and Group CEO of Juwai IQI
Malaysia’s Budget 2027 arrives at an important moment for the country’s housing market. As the first federal budget following the launch of the new 10-year National Housing Policy, it has the opportunity to begin translating the policy’s ambitions into programmes that can materially improve housing affordability and accessibility.
When it comes to affordable housing, Budget 2027 could therefore be one of the most consequential budgets in years. The decisions made now will help establish the foundations for the budgets that follow and determine how effectively the National Housing Policy moves from strategy to execution.
The policy aims to tackle several longstanding weaknesses in the housing market, from inadequate supply in the right locations to financing constraints faced by first-time buyers. Among the areas that deserve attention are data-driven housing planning, alternative financing models, modern construction technologies and the goal of delivering one million affordable homes by 2035.
Build The Right Homes In The Right Places
One persistent challenge is the mismatch between the homes being built and what buyers actually need or can afford.
Malaysia continues to have unsold affordable housing even while many households struggle to find suitable homes in locations where they want to live.
Better use of data can help close this gap.
Housing development should increasingly be guided by information on household income, local demand, population trends, employment centres, transport connectivity and existing supply. If the type, price and location of new homes better reflect actual demand, the risk of completed properties remaining unsold should fall.
The potential financial impact is significant.
If better planning were to prevent just 1,000 affordable homes priced at an average RM195,000 from remaining unsold each year, that could prevent around RM1.95 billion worth of housing from sitting empty over a decade.
That is capital that could instead be circulating through households, developers, financial institutions and the wider economy.
Financing Must Evolve With The Workforce
Building affordable homes is only half of the equation. Buyers must also be able to finance them.
Malaysia’s workforce is changing. A growing number of people earn income through gig work, self-employment and other arrangements that do not fit the traditional monthly-salary model used in conventional mortgage assessment.
The Housing Credit Guarantee Scheme already helps address this by supporting first-time buyers who may not have conventional salary documentation.
Last year, the scheme approved guarantees enabling about 27,000 Malaysians to purchase their first homes. Maintaining that pace over the next decade could potentially help 270,000 households, translating into benefits for close to one million people based on average household size.
But the National Housing Policy also opens the door to other financing structures.
Rent-to-own can enable households to move into a property before eventually becoming owners without having to immediately provide a substantial upfront deposit.
Shared ownership can reduce the initial financial burden by allowing households to acquire a portion of a property first and increase their ownership over time as their financial capacity improves.
Long-term fixed-rate mortgage products could meanwhile provide greater certainty by protecting homebuyers from sudden increases in monthly repayments if interest rates rise after they purchase a property.
Budget 2027 has an opportunity to provide the policy support and incentives required to turn these ideas into more widely accessible options.
Technology Can Help Lower The Cost Of Building
The way Malaysia constructs affordable housing also needs to evolve.
Industrialised Building System, or IBS, is already widely used in affordable housing developments. It can reduce construction time by around 25%, generate less waste and, in some circumstances, reduce construction costs.
Malaysia should now look at the next generation of construction technology.
One example is prefabricated prefinished volumetric construction, where entire rooms or modules are manufactured and completed in a factory before being transported to a development site for assembly.
The approach has the potential to further reduce construction periods, improve quality control and lower dependence on labour-intensive processes.
Its use in Malaysia remains limited. SkyWorld Pearlmont in Seberang Jaya is among the first affordable housing projects locally to adopt the technology.
Budget 2027 does not necessarily need to support one particular construction system. More important is establishing incentives that encourage developers to adopt technologies that can build faster, reduce waste, improve productivity and ultimately bring down costs.
One Million Affordable Homes Is Achievable
Perhaps the most ambitious component of the National Housing Policy is its target of delivering one million affordable homes by 2035.
At first glance, the number may appear daunting. It implies an average of around 100,000 affordable homes annually.
Yet Malaysia has already demonstrated that such a delivery rate is possible.
Under the 12th Malaysia Plan, more than 500,000 affordable homes were reported as completed, under construction or approved by the end of the five-year period — broadly equivalent to the annual pace required to achieve the new target.
The bigger challenge is therefore not simply producing one million units.
Malaysia needs to ensure those homes are in the right locations, at prices households can sustain, connected to jobs and infrastructure, and supported by financing that reflects the realities of today’s workforce.
That is where Budget 2027 becomes especially important.
The National Housing Policy provides the framework, but budgets determine how quickly that framework translates into outcomes.
If Budget 2027 gives meaningful support to data-led planning, innovative home financing, modern construction technologies and sustained affordable housing supply, it could mark the beginning of a more effective housing system.
The measure of success will ultimately not be how many policies are announced, but whether more Malaysian families can find and finance homes that genuinely meet their needs.
For affordable housing, Budget 2027 is where the new policy begins to become reality.
