Luxury homes contribute little to property overhang, says developer

Malaysia's property market is grappling with an "overhang" of unsold homes, but luxury properties are not playing a major role in this issue, according to a leading developer. Jeffrey Chew, CEO of Paramount Property Group, told reporters that conditions in Malaysia have deteriorated slightly over the past year, but demand remains robust in the high-end segment.

In the first half of 2026, compared to the second half of 2025, the number of unsold completed homes rose by 8.6%. Out of the 33,094 unsold properties, 37.3% were priced below RM300,000, while luxury homes priced above RM1 million constituted only 9.5% of the total unsold inventory. Chew attributes the minimal impact of luxury homes on the overhang to the presence of foreign buyers, who are attracted to Malaysia due to its status as a desirable investment destination.

The developer's foreign direct investment has seen a significant surge in recent years, increasing from RM993.9 billion at the end of 2024 to RM1.1 trillion by the second quarter of this year. Paramount Property Group is set to collaborate with Japanese real estate company Mitsui Fudosan through a joint venture. Mitsui Fudosan will acquire a 49% stake in Meridian Kuasa Sdn Bhd, a wholly-owned subsidiary of Paramount.

The venture aims to develop The Ashbourne, a premium residential project in Kuala Lumpur's U-Thant enclave, with an estimated gross development value of nearly RM1.3 billion. The Ashbourne will consist of two towers of high-end serviced residences and is projected to be completed by the fourth quarter of 2030. Mitsuyoshi Saito, Mitsui Fudosan's managing director in Malaysia, emphasized the company's confidence in the market and its commitment to long-term investment in the nation, highlighting the synergistic effect of Paramount's local expertise and Mitsui Fudosan's international development experience.