Property loans continue to rise, reaching RM1.23 trillion overall

In August 2026, property loans in Malaysia surged by 11.9 percent year-on-year, reaching a total of RM134.41 billion, according to data from Bank Negara Malaysia. This growth was higher than the overall banking system loan expansion, which increased by 5.7 percent to RM2.45 trillion during the same period. The property sector accounted for approximately 5.5 percent of all bank loans, representing around RM1.23 trillion of the total.

Financing for purchasing residential properties saw the most significant growth, up 5.3 percent year-on-year to RM925.48 billion, while financing for non-residential properties increased by 7.7 percent to RM304.66 billion. Together, these two property purchase categories made up about 50.3 percent of all banking system loans in August.

Although overall household financing growth remained steady at 5.0 percent year-on-year, the property sector's loan growth was uneven. Residential property purchases experienced moderate growth, while loans for securities purchased saw a slight increase. Notably, the gross impaired loan (GIL) ratio for residential property purchases was 1.2 percent in August, a slight rise from 1.1 percent in the preceding month.

In August 2026, the construction sector's outstanding loans totaled RM104.99 billion, growing by 8.7 percent year-on-year, though there was a minor decline of 0.1 percent month-over-month. The construction sector's GIL ratio stood at 4.4 percent, unchanged since June and slightly lower than the overall banking system GIL ratio of 1.4 percent.