Kuala lumpur: MBSB Investment Bank Bhd (MBSB IB) expects Budget 2026 to continue its focus to improve home ownership for first-time buyers, with incentives to include stamp duty exemptions and a Home Ownership Campaign (HOC) to support the low- to middle-income group.

According to BERNAMA News Agency, the investment bank highlighted that new housing market models under the 13th Malaysia Plan (13MP) reform could also be introduced, such as the build-then-sell concept and enhanced rent-to-own schemes. The build-then-sell model aims to lower risk to buyers and reduce the number of abandoned projects, although it may pose financial challenges to developers with strained cash flow or high net gearing. With increased financial risk for developers under this model-since construction costs must be funded upfront-there will be an increase in costs for developers, which could subsequently lower housing supply.

On the market outlook, MBSB IB reported that new property sales in the first half of 2025 (1H 2025) were in line with expectations, with most developers maintaining their sales targets while anticipating stronger momentum in the second half of 2025 (2H 2025) due to more launches.

Citing data from the National Property Information Centre (NAPIC), the investment bank noted that Malaysia’s residential overhang rose for the third consecutive quarter to 26,911 units in the second quarter of 2025 (2Q 2025), marking the highest level since 2023, driven by a 1,990-unit surge in Kelantan. Nevertheless, MBSB IB expects the property sector to remain stable, supported by healthy buying interest. Despite the rising residential overhang, the situation in key states is deemed manageable, which should keep market sentiment positive.