NAPIC data cited by analysts this week shows unsold completed serviced apartments rose to 23,375 units in the second quarter of 2026, up from 19,263 a quarter earlier, driven mainly by Kuala Lumpur and Selangor. Residential overhang also rose for a seventh straight quarter, to 33,094 units. That does not mean every serviced apartment is a bad buy, but it does mean you should check the specific building’s occupancy, rental competition, title and running costs before you commit.
More unsold stock in KL and Selangor. Choose the building, not the brochure.
What the latest overhang numbers show
“Overhang” refers to completed units (with a certificate of completion) that remain unsold more than nine months after launch. NAPIC tracks serviced apartments separately from residential properties, and both measures went up in the second quarter of 2026:
| Measure (unsold completed units) | Q2 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|
| Residential overhang | 26,911 | 32,801 | 33,094 |
| Serviced apartment overhang | — | 19,263 | 23,375 |
By state, the largest residential overhang in the first half of 2026 was in Johor (4,222 units), followed closely by Selangor (4,185) and Perak (4,075). For serviced apartments, analysts say the increase was driven mainly by Kuala Lumpur and Selangor.
MBSB Research, which keeps a neutral view on the sector, sees rising overhang as a key downside risk: it could limit developers’ pricing power and reduce their appetite for new launches.
Why serviced apartments are piling up
From an agent’s practical view, a few patterns explain why this segment is under more pressure than ordinary condominiums:
- Many similar projects in the same pockets. When several towers with comparable layouts complete around the same time, they compete for the same buyers and tenants.
- Investor-heavy buyer base. Many serviced apartments were sold on rental stories. When rental competition rises, investor demand cools first.
- Small layouts. Studio and one-bedroom units suit a narrower pool of owner-occupiers than family-sized homes.
- Title and running costs. Many serviced apartments sit on commercial land. That can affect quit rent, assessment and sometimes utility billing. Our guide to commercial vs residential title explains the differences.
Serviced apartment vs residential condo: what to compare
| Check | Why it matters |
|---|---|
| Land title (commercial or residential) | Can affect quit rent, assessment, utility billing and how some buyers and banks view the unit |
| Tenure (freehold or leasehold) | Remaining lease affects financing and resale. See freehold vs leasehold explained |
| Maintenance fee and sinking fund | A low fee is not always good if the building cannot maintain itself. See how maintenance fees work |
| Density and lifts | High unit counts with few lifts make daily life harder. Use our lift-ratio test |
| Unit mix | Buildings dominated by tiny units rely more on investors and short-term tenants |
A six-point check before buying in an oversupplied area
- Count the competition. Search the rental and subsale listings for that exact building and the towers around it. Dozens of near-identical listings is a warning sign.
- Visit at night. Lights on in the windows and cars in the car park tell you more about occupancy than any brochure.
- Ask the bank, not just the seller. A bank valuation well below the asking price tells you how the market sees the unit.
- Read the management accounts. Ask about collection rates for maintenance fees and the sinking fund balance.
- Stress-test the rent. Assume a lower rent and a few empty months a year. If the numbers only work at the brochure rent, walk away.
- Compare with a residential-title alternative. At a similar budget, a family-sized unit on residential title may hold demand better.
💡 My practical view: overhang is a market average. Well-run buildings near rail and jobs can still rent and resell well. The aim is not to avoid serviced apartments altogether but to avoid the weakest buildings in a crowded pocket.
Where buyers may find opportunity
Rising unsold stock does shift some bargaining power to buyers. Developers holding completed units may be more flexible on rebates, packages or unit choice. Our guide to negotiating in a buyer’s market shows how to compare nett prices properly, and completed vs new launch condos in KL covers the trade-offs of buying ready versus off-plan.
Frequently asked questions
What is property overhang in Malaysia?
Is it a bad time to buy a serviced apartment in KL?
Can I negotiate a better price on unsold completed units?
Want a second opinion on a building?
WhatsApp DMS Team. We will check the occupancy, rental competition and nett price of the unit you are considering in KL, Selangor or Johor Bahru, free of charge.
About the author: Jason Chan (DMS Jason Chan)
Jason is a registered real estate negotiator (REN 78007) and founder of DMS Team, a property consultancy registered under EUM Realty Sdn Bhd [E(1)1708] with consultants across Kuala Lumpur and Johor Bahru. He researches and reviews every market analysis published on dms-team.com.
This article is general information as at 12 October 2026, written from an agent’s practical perspective. It is not financial or legal advice. Overhang figures are NAPIC data as reported by analysts and media; check the latest NAPIC release for official figures.
Sources: The Star: Challenges expected for property market; Business Today: Property sector drag amid softer loan demand, rising overhangs; EdgeProp Daily Digest, 7 October 2026; NAPIC (official data portal).
Last updated 12 October 2026 · DMS Jason Chan, REN 78007