New home sales poised for up to 50% growth in 2025

One of the drivers will be lower mortgage rates.

The housing market is projected to experience a surge this year, with an expected new home sales volume of 9,000 to 10,000 units in 2025, up 30% to 50% from last year.

According to RHB’s sector update, this growth will be driven by lower mortgage rates, resilient household balance sheets, and an increase in new launch supply of over 13,000 units, which is double that of 2024.

“Demand, however, is expected to remain selective, price-sensitive, and skewed towards the mass market and mid-tier segments,” RHB said.

This follows a shift in buying interest seen in the fourth quarter of 2024 which saw around 3,500 new homes being sold, more than the entire first nine months of last year. Developers sold 6,560 units, up 2% year-on-year (YoY).

RHB said the secondary market may also benefit from the healthy interest in new launches, as the 30% to 50% price differential remains, with a 10% to 15% YoY increase in private resale transaction volumes expected.

Meanwhile, RHB expects residential prices to continue moderating 1% to 4% in 2025 amidst higher supply and choices in the market, coupled with price-sensitive demand. Additional Buyer’s StampDuty deadlines will also possibly limit developers’ pricing power. T

“This is especially noticeable in the high-end segment, where the developer of One Bernam recently dangled discounts of 15% to 27%, resulting in a near sell-out of remaining units,” it said.

RHB said it expects developers to maintain cautious bidding stance amidst ramp-up in land supply over the last three years via government land sales (GLS) programmes. For the first half, GLS has been raised to 8,505 units, comprising 5,030 units in the confirmed list.

There will be three executive condominium sites in the confirmed list, yielding 980 units to cater to rising demand.

“We expect developers to remain selective and measured in their bids as development margins remain thin (5% to 15%) amidst increasing cost pressures. This, in our view, could lead to a more stable and sustained property market recovery in 2025,” RHB said.

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