Budget 2025: A Commentary by PropertyGuru Malaysia

Budget 2025: A Commentary by PropertyGuru Malaysia

We commend the government’s proactive measures outlined in Budget 2025, which clearly demonstrate a strong commitment to addressing the needs of first-time homebuyers in Malaysia. In light of affordability remaining a key concern and the continued demand for affordable housing, the government’s allocation of RM900 million for the People’s Residence Programme (PRR) and Rumah Mesra Rakyat (RMR) projects is a well-timed initiative.

This move aims to benefit nearly 17,500 new residents and directly addresses the financial concerns of first-time homebuyers. According to our H1 2024 Consumer Sentiment Study, respondents highlighted the 1Malaysia Housing Programme (PR1MA) as the most useful housing initiative, followed by Rumah Selangorku and Projek Perumahan Rakyat (PPR). We believe the continued allocation towards affordable housing schemes reinforce the critical need to provide more affordable housing options in a market where inflation, rising interest rates, and cost of living continue to impact the ability of many Malaysians to purchase their first home. 

The government’s allocation of RM12.8 billion for the House Credit Guarantee Scheme (SJKP) to support 57,000 first-time buyers, marks a significant step in improving financial accessibility for homeownership. This expanded scheme broadens eligibility, enabling individuals with limited financial history or lower incomes to qualify for home loans. According to our H2 2024 Consumer Sentiment Study, 44% of first time buyers struggle to save for down payments, highlighting the impact of inflation, high living costs, and rising interest rates on Malaysians’ ability to achieve homeownership. These challenges make the enhanced support under SJKP even more crucial in helping first-time buyers secure their homes. 

Additionally, the Step Up Financing Scheme, introduced under the SJKP, provides lower loan repayments for the first five years, specifically designed to ease the financial burden on young Malaysians and first time homebuyers. High interest rates continue to be a significant barrier for many potential homeowners, with 40% of respondents identifying it as a major challenge in managing their monthly mortgage payments. These initiatives collectively reflect the government’s commitment to enabling more Malaysians to overcome the hurdles of home financing and achieve their homeownership aspirations.  

Moreover, the government has introduced income tax relief on home loan interest payments, offering up to RM7,000 for properties priced at RM500,000 or below, and RM5,000 for properties between RM500,000 and RM750,000. As many Malaysians are looking for ways to ease their financial burden, our study revealed that 50% of respondents expressed a strong desire for increased government support through affordable housing schemes and financial subsidies. This relief aligns with the urgent need for supportive measures in the housing market. It reflects the government’s responsiveness to the challenges faced by potential homeowners and reinforces their commitment to creating a more accessible and affordable housing landscape in Malaysia. 

PropertyGuru Malaysia is committed to empowering consumers with the data and insights they need to make informed homeownership decisions. As we continue to advocate for affordable housing, the initiatives announced in Budget 2025 reflect a positive step toward addressing the challenges faced by first-time buyers. The collaboration between the government and the private sector will be essential in driving long-term solutions for housing affordability. We are confident that with these efforts, more Malaysians will have the opportunity to overcome financial barriers and access a wider range of homeownership options. 

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