MALAYSIA’S PROPERTY market continues to display resilience despite mounting economic headwinds, with housing loan applications and approvals rebounding strongly in April 2026 following a softer March.
While the latest banking data suggests that homebuying sentiment remains intact, analysts are increasingly cautious about the months ahead, warning that inflationary pressures, tighter lending standards and rising development costs could temper demand and weigh on developers’ earnings in the second half of the year.
Total loan application for purchase of property increased to RM62.8 bil in April 2026 as loan applications picked up from the weaker levels seen in March due to the Hari Raya holiday.
On a year-on-year basis, loan application was higher by +11.8% year-on-year (yoy) in April 2026 following a marginal decline of -+0.5% yoy in March 2026.
Cumulatively, total loan application in the four months of calendar year 2026 (4MCY26) was marginally higher at RM206.6 bil (+1.8% yoy).
Overall, buying sentiment is still holding up well as Malaysia still maintains fuel subsidies for RON95 and logistics sectors.
“Nevertheless, we are slightly less sanguine on buying sentiment going forward as buying sentiment may moderate amid inflationary pressures,” said MBSB Research.
Approved loan for purchase of property increased to RM26.9 bil in April 2026, underpinning by the increase in loan application.
On a year-on-year basis, approved loan was also higher by +8.3% yoy in April 2026 due to higher loan application albeit loan approval rate declined to 40.6% in April 2026 from 44.3% in April 2025.
MBSB reckons that the lower approval rate could be due to banks adopting a more stringent stance amid geopolitical tensions.
Cumulatively, total approved loans in 4MCY26 were marginally higher at RM86.9 bil (+2.5% yoy).
For the recently concluded earnings reporting season, earnings of property companies were largely in line. IOI Properties Group reported earnings that beat MBSB’s expectation due to recognition of Malacca land sales in quarter three financial year 2026 (3QFY26) which lifted earnings substantially.
Overall, earnings of property companies were mixed in 1QCY26, with three companies reported earnings growth while three companies reported earnings decline.
IOI Properties Group recorded the highest quarterly earnings growth of +134.7%yoy as earnings ballooned by land sales. Meanwhile, Mah Sing Group and Sunway Berhad reported moderate quarterly earnings growth of +6.8%yoy and +5.9%yoy.
Overall 1QCY26 earnings of developers were somewhat softer than expected which partly dragged by the narrowing margin.
“Going forward, we see that earnings outlook to be slightly subdued going forward as cost pressures are expected to become more apparent in the coming quarters,” said MBSB.
On the other hand, property sales were largely subdued in 1QCY26 due to the festive period but expected to pick up in the coming quarters.
While the loan application data in April 2026 indicates that buying sentiment remains steady in 4MCY26, we think that buying sentiment may moderate going forward if inflation trends higher.
Besides, MBSB see that cost pressure may weigh on earnings of property companies in the second half of calendar year 2026. Hence, the research house maintains their Neutral stance on the sector.—June 9, 2026
Main image: South China Morning Post
