Foreign Buyers Comprise Just 0.76% of Malaysian Home Transactions in H1 2025

Foreign Buyers' Diminished Role in Malaysia's Property Market in H1 2025

In the first half of 2025, foreign buyers accounted for a mere 0.76% of Malaysia's residential property transactions, with only 913 transactions completed. These purchases amounted to a total value of RM1.904 billion. The overwhelming majority of the market was driven by domestic buyers, who conducted 119,394 transactions valued at RM47.47 billion. This data, shared by Malaysia's Housing and Local Government Minister Nga Kor Ming, highlights a significant shift in the country's property dynamic. The government is increasingly focused on policies that maintain housing accessibility for Malaysians, while regulating foreign investment. Efforts such as proposing an increase in the stamp duty for foreign individuals and companies from 4% to a flat rate of 8% are examples of measures being considered to ensure this balance.

Chinese Buyers Lead Foreign Investment in Malaysian Real Estate

Despite the overall decline in foreign buyer share, Chinese investors remain the most active within the foreign segment. They accounted for 329 transactions valued at approximately RM834.65 million in the first half of 2025. Following China, Singapore/for-sale/singapore/singapore-city">Singapore and India are the next largest foreign investors in Malaysia's real estate market. This trend aligns with broader regional investment patterns, where Chinese capital continues to be a significant force, especially in Southeast Asian real estate markets. The preference of Chinese buyers for Malaysian properties can be attributed to favorable price points and the relative ease of property acquisition compared to other regional markets. However, the growing regulatory scrutiny may impact future investments from these foreign entities.

Malaysia's Domestic Buyers Dominate H1 2025 Property Transactions

The dominance of domestic buyers in Malaysia's property market is underscored by their massive share of transactions in H1 2025. With 119,394 transactions valued at RM47.47 billion, local buyers have shown robust participation, buoyed by economic stability and favorable financing options. The Malaysian government has been proactive in supporting local buyers through various incentives and policies aimed at enhancing homeownership. This includes affordable housing schemes and adjustments in loan eligibility criteria that accommodate a wider range of income levels. According to the Star report, these initiatives have played a pivotal role in sustaining domestic interest and involvement in the real estate market.

Comparative Analysis: Malaysia vs. Global Real Estate Trends

Globally, Malaysia's property market presents a contrasting scenario when compared to other major markets. For instance, the U.S. real estate market witnessed international buyers accounting for 2.3% of total transactions from April 2024 to March 2025, significantly higher than Malaysia's 0.76%. Similarly, in India, the first half of 2025 saw a shift with domestic capital rising and foreign flows dipping, indicating a broader trend where local investors are gaining prominence. The comparative data underscores distinct market dynamics shaped by national policies and economic conditions in Malaysia, which prioritizes local homeownership over foreign investment.

The Impact of Potential Policy Changes on Foreign Investors

The Malaysian government's consideration of a higher stamp duty on residential property transactions involving foreign buyers may further deter external investments. With the proposed flat rate of 8%, up from the current 4%, foreign investors might face increased costs, making the Malaysian market less attractive compared to neighboring countries offering more favorable terms. This policy move aims to secure housing affordability for Malaysians but could also result in decreased foreign capital inflow. According to The Star, such considerations align with the government's strategy to balance foreign investment with local needs, ensuring sustainable growth in the housing sector.

Future Implications for the Malaysian Real Estate Market

Looking forward, Malaysia's real estate market is likely to experience continued emphasis on domestic growth while cautiously managing foreign investment. The government's regulatory strategies are poised to create a stable environment that encourages local purchases and limits speculative foreign activities. This approach could position Malaysia as a resilient market, particularly attractive to domestic buyers seeking stability amidst global economic uncertainties. The potential increase in stamp duty for foreign buyers underscores a commitment to safeguarding local interests, an aspect that could redefine the market's attractiveness for international investors. As the global economic landscape evolves, Malaysia's policies will play a crucial role in shaping its real estate sector's trajectory.