Everything You Should Know About Affordable Housing In Malaysia

Even in 2025, affordable housing in Malaysia still feels like a distant goal. Whether you’re a newly married couple, part of the middle-income group struggling with rising living costs, or juggling family responsibilities while trying to save for the future, housing affordability continues to be challenging.

While property prices have seen some signs of stabilising, many people, especially those living in urban centres, still find themselves priced out of the market. In response, the government has introduced several housing schemes in Malaysia in 2025 to help more people, particularly first-time buyers and lower-income families, get on the property ladder.

These efforts range from financing schemes and tax reliefs to affordable rental options and new housing developments. They form part of a wider strategy under the MADANI Economy and the final phase of the 12th Malaysia Plan (12MP).

But what do these measures really mean in practical terms? And who stands to benefit?

To help you navigate what’s new and what’s relevant, we’ve answered some of the most frequently asked questions about Malaysia’s affordable housing landscape in 2025.

Frequently Asked Questions (FAQs)

1. What new affordable housing schemes were introduced in 2025?

In 2025, the government ramped up its efforts to tackle housing affordability with a fresh wave of schemes aimed at helping low- and middle-income Malaysians find stable, long-term housing. These initiatives are part of a broader commitment to meet the demands of a growing population while narrowing the homeownership gap.

• PRR and RMR: RM900 million has been allocated to build 48 People’s Housing Projects (PRR) and 14 Rumah Mesra Rakyat (RMR) developments, with 30 projects expected to be completed by the end of the year. These are projected to provide homes for around 17,500 families.

• i-Biaya: Introduced under the HOPE (Home Ownership Programme for Everyone) umbrella, i-Biaya offers credit guarantees and tailored financing solutions to make it easier for B40 and M40 individuals to buy their first home, especially those without fixed incomes.

2. How much financing help is available for first-time buyers?

Buying your first home can feel daunting—especially when upfront costs and loan approvals get in the way. To ease the burden, the government has introduced several financing support measures in 2025, with a strong focus on helping first-time buyers secure loans and reduce their financial load.

• SJKP (Housing Credit Guarantee Scheme): The government has allocated RM10 billion in credit guarantees through Syarikat Jaminan Kredit Perumahan (SJKP), helping eligible borrowers—especially those without fixed incomes—access home financing of up to RM500,000. As of early 2025, the scheme has already approved over 76,000 applications, amounting to RM17.6 billion in total financing.

• Bank Negara’s Developer Facility: To encourage the construction of truly affordable homes, Bank Negara Malaysia has set aside RM1 billion under a special facility for developers building homes priced below RM150,000. This aims to boost supply in the lower-income housing segment, particularly in underserved areas.

• Tax relief for buyers: First-time homebuyers can also claim up to RM7,000 in personal income tax relief for properties priced under RM500,000. For homes priced between RM500,001 and RM750,000, a relief of RM5,000 is available. This incentive is applicable from 2025 until 2027.

3. Who benefits from MADANI rental schemes?

Recognising that not everyone is ready to buy a home, the government has also introduced more flexible rental-based housing options under the MADANI framework. These are designed to support a wider range of Malaysians—from young working adults to lower-income families—by offering affordable rental units with long-term stability and the option to buy later.

• For M40 households (monthly income ≤ RM7,000): Units priced at RM200,000, sized around 800 sq ft, offering a more spacious and comfortable option for growing families.
• For B40 households (monthly income ≤ RM5,000): Slightly smaller units priced at RM180,000, with 750 sq ft of living space, tailored to meet essential housing needs affordably.
• For singles and young couples (monthly income ≤ RM4,000): Compact homes priced between RM150,000 and RM200,000, averaging 700 sq ft, ideal for those just starting out.

These schemes are meant to bridge the gap between renting and owning, while still giving tenants a sense of permanence and security.

4. How close is the target of 500,000 units under the 12th Malaysia Plan (12MP)?

Malaysia’s five-year plan to deliver half a million affordable homes is now nearing completion. As of 1 December 2024, around 93.9% of the target—466,421 units—had either been completed, were under construction, or had received development approval.

With the final stretch underway, the government remains confident that the full 500,000-unit goal will be met by the end of 2025. Looking ahead, this momentum is expected to carry forward into the 13th Malaysia Plan, ensuring continued progress on housing access.

5. What improvements are being made to existing public housing?

Affordable housing isn’t just about building new homes—it’s also about maintaining the ones people already live in. In 2025, the government allocated RM200 million to improve living conditions in low- and medium-cost strata housing, with a focus on essentials like elevator upgrades, plumbing repairs, and safety features.

In addition, RM100 million has been earmarked to rejuvenate 48 MADANI public parks, and to upgrade community facilities in Chinese New Villages and Indian settlements. These efforts aim to create cleaner, safer, and more liveable neighbourhoods for all.

6. What challenges remain in making housing truly affordable?

Despite the increased focus and funding, some persistent challenges still stand in the way.

• Limited supply: Homes priced below RM200,000 make up less than 20% of new housing launches, especially in urban areas where land is more expensive and demand is higher.

• Rising development costs: Construction materials, labour shortages, and land prices continue to push costs upward, making it harder for developers to deliver affordable units without subsidies or incentives.

For Malaysia’s housing strategy to succeed long term, strong coordination across agencies, effective policy implementation, and sustained investment will be critical.