Malaysian banks approved 39.1% of the value of residential loans applied for in the first half of 2026, the first reading under 40% since 2021, according to the EdgeProp Property Market Report H1/2026, EdgeProp reported on 6 November 2026.
The arithmetic is short. Applications rose 2.6% from a year earlier to RM231.03 billion. Approvals fell 1.2% to RM90.35 billion. Divide one by the other and you get 39.1%, against 40.6% a year earlier. Working back from those percentages, applications grew by about RM5.9 billion while approvals shrank by about RM1.1 billion.
The tempting next step is wrong. The gap between the two totals, RM140.68 billion, is not the value of loans refused. The report said these are "aggregate figures rather than matched applications and approvals", and that they "do not establish reasons for rejection or indicate changes in regulatory lending thresholds".
Nor is 39.1% the share of buyers turned down. Bank Negara Malaysia has measured approvals differently, by the number of applications, not their value. On that basis it reported an overall approval rate of 74.2% in a 2017 quarterly bulletin, and called it a myth that rejection rates ran as high as 60%, The Star reported at the time. The two measures cannot be set side by side, and that BNM figure is nine years old. What the 39.1% does show is direction: more money sought, less money approved.
The more useful numbers for a buyer are in what the report said about product. Unsold condominiums were 1.1% to 1.9% of supply in Kuala Lumpur, Selangor and Johor. Serviced apartments were 7.6% in KL, 9.5% in Selangor and 13% in Johor, and more than one in five KL SoHo units, 21.8%, were unsold. Landed homes ran from 0.1% to 1.3% across KL, Selangor, Johor and Penang. In Penang, unsold high-rise stood at 6.5% overall and 4.5% for condominiums. Those counts include both completed and under-construction units.
"Low policy rates alone cannot close the gap when the units being built do not fit household budgets or loan eligibility," the report said. The Overnight Policy Rate is 2.75%.
Supply is arriving unevenly. Johor added 14,697 high-rise units in the first half, more than in all of 2025, while transaction volume fell 15.7% year on year, the report said. Selangor added 17,316 units as transactions fell 5.4%.
Developers are starting fewer homes. Residential construction starts fell 22.7% in 2025 and another 36.3% year on year in the first half of 2026, and a Real Estate and Housing Developers' Association survey found nearly two-thirds of developers had no plans to launch homes in the second half, The Star reported on 7 November.
Sources: EdgeProp, The Star, The Star on Bank Negara's 2017 bulletin.
