Overhang Property In Malaysia: Does It Really Push Property Prices Down?

Overhang Property In Malaysia: Does It Really Push Property Prices Down?

Whenever we read about Malaysia’s property overhang, the usual reaction is quite predictable.

“Wah, so many unsold properties! Property prices must come down lah!”

Hmm. Not necessarily. Come, let’s look at numbers. Your conclusion is your conclusion and my conclusion is as below.

Yes, property overhang is a real issue. According to the latest National Property Information Centre (NAPIC) data, Malaysia had 33,094 completed but unsold residential units worth RM17.78 billion in the first half of 2026. This was higher than the 30,471 units recorded previously.

So, should we conclude that property prices will fall because there are so many unsold units?

I don’t think so. Because there is something very important that we sometimes forget.

People may simply hate those overhang properties.

WHAT EXACTLY IS PROPERTY OVERHANG?

First, let’s get the definition right.

Overhang is not the same as every unsold property.

For residential property, NAPIC’s overhang category refers to completed units which remain unsold for more than nine months after launch. Properties that are still under construction or have just been completed may be unsold, but they are not necessarily classified as overhang yet.

This distinction matters.

Otherwise, we see a big number and immediately think:

“OMG! Nobody is buying property!”

Actually, plenty of people are still buying.

In the first half of 2026, Malaysia recorded 187,320 property transactions worth RM105.12 billion. Residential properties alone accounted for 110,998 transactions worth RM47.11 billion.

So clearly, Malaysians are still buying properties.

The question is which properties are they buying?

#1 IF PEOPLE LOVE IT, WHY IS IT STILL UNSOLD?

This is my simple question.

Imagine there is a property with a great location, good layout, good facilities, good surrounding amenities and a price buyers think is reasonable.

Would it remain unsold for years? Probably not.

If many people love the property and think it offers good value, someone will eventually buy it.

This is why I don’t automatically see “overhang” as “bad property”.

But I also don’t automatically see it as a bargain.

Some units remain unsold because buyers simply don’t want them.

Maybe the location is inconvenient. Maybe the layout is strange.

Maybe the property is too small. Maybe there are too many similar units nearby.

Maybe the maintenance fee is too high. (YES, I went to one condo where the maintenance fee alone was RM1,000. Come on!? Okay, maybe I am not the target market)

Maybe there is no rental demand. Maybe the price is simply too high. (This is usually the case, then they will start to discount…)

Or maybe the design is something that buyers look at and say:

“Sorry yeah, I don’t want this.”

Haha.

#2 THE LATEST NUMBERS ACTUALLY TELL US SOMETHING

The latest data makes this even more interesting.

Of the 33,094 completed unsold residential units in H1 2026, 43.4% were high-rise properties, while terraced houses accounted for 34.9%. About 37.3% were priced at RM300,000 and below.

This is important.

It means overhang is not simply a story about expensive luxury properties that nobody can afford.

There are also supposedly “affordable” properties in the overhang statistics.

Why?

Because affordable does not automatically mean desirable.

A RM300,000 property in the wrong location may be less attractive than a RM400,000 property in a location buyers actually want.

Price is only one part of the equation.

#3 OVERHANG DOES NOT MEAN ALL PROPERTY PRICES MUST DROP

Let’s say there are 1,000 unsold units in Malaysia.

Does that mean every property owner in Malaysia must reduce their asking price?

Of course not.

The owner of a landed home in a mature neighbourhood with limited supply does not suddenly need to sell at a discount just because a developer somewhere else has 500 unsold condominium units.

The two properties may have completely different buyers.

Different locations. Different sizes.

Different demand. Different supply.

Different reasons for buying.

This is why we need to be careful when reading national overhang numbers.

Property is local. Many times, the property next door could be undesirable and yet just one neighborhood away, people are willing to pay more.

Sometimes, even two projects sitting next to each other can have very different demand.

#4 WHAT IF THE PROPERTY IS ACTUALLY GOOD?

Now, let’s turn the question around.

Suppose we find an overhang unit.

We inspect it.

We like the layout.

We like the location.

We like the facilities.

We can see ourselves living there.

We check the surrounding rental market.

We compare prices with other properties.

The developer is offering an attractive package.

And after doing our homework, we believe the property is genuinely good value.

Should we reject it simply because it is classified as “overhang”?

I wouldn’t.

In fact, overhang properties can sometimes create opportunities because developers may become more willing to negotiate when they want to clear completed inventory.

But don’t buy simply because someone tells us:

“Overhang property sure cheap!”

No lah.

Cheap is not the same as good value.

#5 HERE IS MY FAVOURITE QUESTION

Imagine we viewed a particular property last year.

We hated it.

The location was bad.

The layout was bad.

The design was bad.

The surrounding area was not what we wanted.

And we thought the price was too high.

Then, one year later, we read that the property has officially become overhang.

We go back and view the same unit.

Question:

Will we suddenly fall in love with it?

Probably not.

Unless the price has dropped tremendously, of course. Haha.

This is why some properties can remain in the overhang statistics for a very long time.

It is not necessarily because nobody wants property.

It may simply be because nobody wants THAT property at THAT price.

SO, DOES OVERHANG PUSH PROPERTY PRICES DOWN?

My answer is:

Not necessarily. (Usually, no.)

Overhang can certainly create pressure, especially when there is a large concentration of similar properties competing for the same buyers and tenants.

The latest numbers show that Malaysia still has a genuine completed-unsold inventory issue. The government itself has highlighted overhang as an area requiring attention, including affordable and mid-priced homes.

But we should not make the mistake of thinking that every property will become cheaper simply because national overhang numbers are high.

Because buyers are not buying “Malaysia’s property market”.

They are buying a particular property, in a particular location, at a particular price.

And sometimes, the reason a particular property is still sitting there unsold is very simple.

People may just hate that particular property.

So, when we see property overhang statistics, don’t panic.

Don’t celebrate either.

Do our homework.

Look at the location.

Look at actual transactions.

Look at rental demand.

Look at the surrounding supply.

Look at the price per square foot.

And most importantly, ask ourselves:

“If there was no word called OVERHANG, would I still want to buy this property?”

If the answer is yes, then perhaps we have something worth investigating.

If the answer is no, then a 30% discount may not even make us happy.

After all, if we hated it last year, chances are we may still hate it this year.

Overhang property does not push down prices because people may just hate those overhang ones.

Happy property hunting!

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References

1. National Property Information Centre (NAPIC) — Property Market Report H1 2026 / Latest Publications. NAPIC’s latest publication list includes the H1 2026 Property Market Report, Property Market Status Report and residential stock/status data.
   NAPIC — National Property Information Centre
2. Ministry of Finance Malaysia — Malaysia Property Market Remains Resilient With RM105.12 Billion Transactions In 1H 2026. Includes the latest transaction, house-price and completed-unsold residential figures.
   Ministry of Finance Malaysia
3. Ministry of Finance Malaysia — 1H 2026 Property Market Report launch speech. Provides further details on the 33,094 completed unsold residential units and 23,375 completed unsold serviced apartments.
   MOF Malaysia — Property Market Report H1 2026
4. Malay Mail — Malaysia’s unsold completed homes rise 8.6% in H1 2026, but market is resilient. Provides the breakdown by property type, price range, launch age and state.
   Malay Mail — Malaysia’s unsold completed homes rise 8.6% in H1 2026
5. Charles Tan / kopiandproperty.com — “Overhang Units and Unsold Units. Are They ‘Same Same?’”. Background on the distinction between unsold and overhang properties and why not all overhang units are equal.
6. Charles Tan / kopiandproperty.com — “Property Investment 101: You Hate That Property Last Year, Will You Like The Same Property This Year??”. The original “people may simply hate that property” argument and practical approach to evaluating overhang units.
7. Original article: Overhang Property In Malaysia — kopiandproperty.com