Budget 2026 To Prioritise Affordable Housing, Market Stability, Minister Says
Business Today, 4 September 2025
Affordable housing is set to take centre stage in Budget 2026 as the government looks to strengthen structural reforms in Malaysia’s property sector, Finance Minister II Datuk Seri Amir Hamzah Azizan said.
He said reforms under the 13th Malaysia Plan will be aimed at easing homeownership for lower- and middle-income households while safeguarding market stability. Key measures under review include scaling up rent-to-own schemes and gradually adopting a build-then-sell model to reduce the risk of abandoned projects.
“Affordable housing will continue to be a priority for Malaysia going forward, and we are looking at new mechanisms to ensure more people can own and afford homes,” Amir Hamzah said.
Market Dynamics and Income Linkages
The property sector has faced a rise in residential overhang since early 2025, though Amir Hamzah stressed that “the overall market is still stable”.
He said reforms will focus on targeted support for affordable housing while addressing structural imbalances that have led to mismatched supply and demand.
The minister underscored that housing affordability is inseparable from household income. To this end, ongoing labour market reforms — including higher minimum wages, the progressive wage model and incentives for living wages — are designed to strengthen purchasing power.
“The most important area remains fixing the basis of affordability in the country, which includes strengthening income levels,” he said, adding that under the 13MP, labour’s share of the economy is targeted to rise from 33% to 40%.
Policy Tools and Safeguards
Financing support remains critical, with the Skim Jaminan Kredit Perumahan enabling those without fixed incomes to secure housing loans through government guarantees. At the same time, Amir Hamzah reassured developers and buyers that the expansion of the service tax will not impact the residential housing sector, as construction services and materials for residential projects remain exempt.
“This safeguard ensures rakyat affordability while shifting the tax burden to the commercial sector,” he explained.
Fuel Subsidy Rationalisation
Separately, Amir Hamzah reaffirmed that the long-awaited RON95 fuel subsidy rationalisation plan is on track for rollout before the end of 2025. The system will leverage MyKad verification to ensure subsidies are channelled to those most in need, reinforcing fiscal sustainability while cushioning vulnerable groups.
“We have said before, the RON95 subsidy plan will be implemented before the end of this year. It will use the national identification card system and the proper system so that the majority of the people will receive the subsidy,” he said.
(Web Source: https://www.businesstoday.com.my/2025/09/04/budget-2026-to-prioritise-affordable-housing-market-stability-minister-says/)