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Serviced Apartments in KL and Selangor: What 23,375 Unsold Units Mean for Buyers in 2026

The overhang jumped by about a quarter in six months. Here is what the official data shows, what commercial land means for your bills and exemptions, and how to judge a project before you commit.

By Jessica Leong, Registered Estate Agent E 3208, PropNex · · 10 min read

Originally published on Medium: read it on Medium

Cover illustration

Serviced apartments are now a normal part of the Klang Valley skyline. For many buyers they are simply "condos" with a different label. The official numbers, the title and the monthly bills say otherwise, and buyers should understand the differences before they sign.

This article sets out what the latest data from the National Property Information Centre (NAPIC) shows, what a commercial-land title can mean in practice, and how to judge a project, whether you are buying a new launch or a subsale unit.

Not financial advice: this is general information from public sources as at October 2026. It is not financial, legal or tax advice. Please speak to your own lawyer, banker and tax adviser before you buy.

What the overhang numbers say

NAPIC counts a completed unit as "unsold" (part of the overhang) when it has its Certificate of Completion and Compliance but is still unsold more than nine months after launch.

According to NAPIC's Property Market Status Report H1 2026:

  • 23,375 completed serviced apartments were unsold at end-June 2026, valued at RM16.28 billion.
  • That is up 24.7% in units from end-2025 (18,752 units, RM15.42 billion) and up 30.7% from H1 2025 (17,883 units).
  • Serviced apartments made up 70.1% of all unsold completed commercial property in the country.

When NAPIC launched the 1H2026 report on 10 September 2026, The Edge reported the Finance Ministry's figure of 23,375 units but a value of RM19.33 billion. The value printed in NAPIC's report itself is RM16.28 billion. I use NAPIC's figure here.

The longer trend matters. NAPIC's annual reports show the serviced apartment overhang falling every year from 2021 to 2025, then jumping in the first half of 2026:

  • End-2021: 24,295 units (RM20.45 billion)
  • End-2022: 23,978 units (RM20.19 billion)
  • End-2023: 20,825 units (RM16.63 billion)
  • End-2024: 19,564 units (RM15.70 billion)
  • End-2025: 18,752 units (RM15.42 billion)
  • End-June 2026: 23,375 units (RM16.28 billion)
Bar chart of unsold completed serviced apartments in Malaysia from end-2021 to end-June 2026
Unsold completed serviced apartments fell for four years, then rose sharply in H1 2026. Source: NAPIC Property Market Status Reports 2025 and H1 2026.

Two other details from the H1 2026 report:

  • Price: 55.2% of the unsold units are priced between RM500,000 and RM1 million, and 18.2% are above RM1 million.
  • Age: 71.1% (16,612 units) have been on the market for 6 to 10 years. Only 3.3% have been on the market for less than three years.

In other words, most of the overhang is older stock, not just-completed projects.

Where the unsold units are: KL and Selangor

NAPIC's state table for H1 2026 shows:

  • Johor: 9,946 units (RM6.29 billion), about 42.5% of the national total
  • Kuala Lumpur: 6,343 units (RM6.41 billion), about 27.1%
  • Selangor: 4,034 units (RM1.80 billion), about 17.3%
  • All other states combined: 3,052 units, about 13.1%

(The percentages are my calculations from NAPIC's unit counts.)

Together, KL and Selangor hold about 44% of the unsold completed serviced apartments. Their profiles differ, though. KL has fewer units than Johor but a higher total value, so its unsold units are more expensive on average. Selangor's unsold stock is far cheaper on average.

The pipeline is just as important. NAPIC also counts units still under construction that remain unsold. At end-June 2026, that was 17,437 serviced apartments in Selangor and 8,767 in KL, out of 50,112 nationally.

Bar chart of unsold completed serviced apartments by state in H1 2026
Johor, KL and Selangor hold most of the unsold serviced apartments. Source: NAPIC Property Market Status Report H1 2026; percentages calculated from NAPIC unit counts.

For context, Khazanah Research Institute (KRI) noted in December 2025 that KL and Selangor hold about 63% of Malaysia's total stock of serviced apartments (148,833 and 143,215 units at Q3 2025, based on NAPIC data).

Why the title matters: commercial land

A serviced apartment is usually built on land approved for commercial or mixed use rather than residential use, as EdgeProp's buying guide notes. That is why NAPIC counts serviced apartments under commercial property, not residential. It is also why your bills and your eligibility for certain exemptions can differ from those of a condo owner.

Here is what the official sources say, point by point.

1. Assessment tax (cukai taksiran)

Assessment is a percentage of the property's estimated annual rental value. DBKL publishes its rates:

  • Residential building: 4%
  • Serviced apartment: 7% within the 36-square-mile city area, 5% outside it
  • Commercial building: 10% (within) or 8% (outside)

Selangor councils set their own rates, so ask the seller or management office for the latest assessment bill.

2. Quit rent or parcel rent

Quit rent is set by state rules and depends on the land category, among other things. Do not assume a small unit will have a small bill. Ask for the latest quit rent or parcel rent notice.

3. Electricity

The Energy Commission (Suruhanjaya Tenaga) says the tariff category for a serviced apartment depends on how the unit is used. If it is used as a home and not for business, the registered consumer may apply to the electricity supplier to switch to the domestic tariff. Check a recent bill, and ask whether the unit has already been converted.

4. Water (Selangor)

Air Selangor's published tariff codes for bulk-metered high-rise buildings list:

  • apartment/condominium (code 17) at a flat RM2.09 per cubic metre;
  • service apartment (code 11) at RM3.51 per cubic metre for the first 35 cubic metres, and RM3.83 above that.

Ask the management office how water is metered and billed in the building.

5. First-home stamp duty exemption

This is the most important point for first-time buyers.

  • The Finance Act 2025 amended the Stamp Act definition of "residential property" to include a "service apartment … solely to be used as a dwelling house".
  • But the LHDN statutory declaration that buyers sign to claim the first-home exemption requires them to confirm that the property is not a SOHO, SOFO, SOVO or service apartment.
  • In April 2026, the Bar Council flagged this conflict (Circular 128/2026) and said it would write to LHDN. I found no published LHDN response.
  • In Kuan Zi Yi v Collector of Stamp Duty (June 2025), the Johor Bahru High Court ruled against a first-time buyer of a service apartment. The Court held that the unit did not qualify as "residential property" under the exemption order. According to LHDN's case note, the title described the use as residential, shop and clubhouse.

The practical point: do not budget on getting the exemption for a serviced apartment unless your lawyer confirms it in writing.

6. Housing schemes

Check each scheme's own rules. For example, SJKP's Housing Credit Guarantee Scheme (HCGS) FAQ says the scheme is "specifically for the purchase of residential houses only", for the buyer's first home, which must be owner-occupied. It does not specifically mention serviced apartments, so confirm eligibility with the participating bank before you rely on it.

Comparison graphic of residential condo vs serviced apartment on commercial land: assessment, water, electricity, stamp duty exemption and short-term rental
What can differ between a condo and a serviced apartment, using official sources. Always check the actual title and bills for the unit you are considering.

Rental yield and short-term rentals

Many serviced apartments are sold on rental potential. Before you rely on a yield figure, check three things.

1. Gross vs net. Gross yield is annual rent divided by price. Net yield also deducts maintenance and sinking fund charges, assessment, quit rent, insurance, furnishing, agent fees and empty months. On a serviced apartment, the higher assessment and possibly higher utility costs come straight out of net yield.

2. Evidence of rent. Look for evidence of rents actually achieved in the building, not the rent quoted in marketing. NAPIC publishes price and rental tables for KL and Selangor ("Jadual Harga dan Sewa") on its website.

3. Short-term rental (STR) rules. These are tightening, and building by-laws come first:

  • Federal Court, 2020: in Innab Salil v Verve Suites Mont' Kiara Management Corporation, the Federal Court held that a management corporation could validly ban short-term rentals through its house rules.
  • Kuala Lumpur: DBKL told The Star in April 2025 that short-term rental accommodation falls under "Tourist Accommodation" in the Draft Kuala Lumpur Local Plan 2040.
    • It is permitted or conditionally permitted on commercial, mixed-development and institutional land.
    • In strata buildings, it needs the management body's approval and must follow by-laws adopted at a general meeting.
  • Selangor: a proposed cap of 180 nights a year was still under review in January 2026, with no start date (The Star, 9 January 2026).
    • Selangor's Lestari Charge, a sustainability fee of RM2 to RM7 per stay collected by accommodation providers, began on 1 January 2026.

So in KL, a serviced apartment on commercial land may be better placed for short-term rental than a condo on residential land, as far as zoning goes. The building's by-laws still decide. If your numbers only work with Airbnb-style income, check the building's house rules and the local council position first.

How to judge a project

The overhang figures are national and state totals. What matters to you is the building. Look at:

  • Absorption. For a new launch, ask how many units have been sold and how long sales have taken. For a completed building, check how many units are vacant or listed for sale and rent at the same time.
  • Demand drivers. Is there a rail station within walking distance? Are there office clusters, universities or hospitals nearby that create rental demand? How many competing towers are under construction around it?
  • Maintenance and sinking fund. Get the current rate per square foot and the management's latest accounts. Ask whether an increase is planned, and how much the sinking fund holds against the building's age.
  • Management quality. Read the minutes of recent general meetings. Look for arrears levels, lift and facility downtime, and security. Check the house rules, including any short-stay restrictions.
  • The resale market. Check transacted prices, not asking prices. NAPIC's transaction data and the land office records your lawyer can search are better guides than listing portals. Remember that the next buyer will face the same title questions you do.
  • The papers. For a new launch, ask whether the SPA is a statutory Schedule H agreement, and check the developer's licence and advertising permit.

Where unsold supply can work in your favour

A high overhang does not make every unit cheap. It does change the balance in some situations:

  • More choice. With thousands of completed units unsold in KL and Selangor, you can compare buildings, floors and layouts rather than taking the only unit available.
  • More room to negotiate on subsales. When similar units are listed in the same building, owners compete for a smaller pool of buyers. Use transacted prices to back your offer.
  • Time to do due diligence. Without a queue of buyers behind you, you can ask for bills, accounts and house rules before you commit.
  • Completed, inspectable stock. Much of the overhang is already built, so you can inspect the actual unit, building and surroundings rather than buy off a brochure.

The flip side: the same oversupply can weigh on resale prices and rents when you want to exit. Price that risk in.

Buyer's checklist

  1. Confirm the land use category and express conditions on the title (or master title) through your lawyer.
  2. Get the latest assessment, quit rent, maintenance and sinking fund bills.
  3. Check the electricity tariff on a recent bill, and whether domestic tariff conversion is possible.
  4. Ask how water is metered and which tariff applies.
  5. Assume no first-home stamp duty exemption unless your lawyer confirms otherwise in writing.
  6. Confirm any housing scheme eligibility with the bank before you count on it.
  7. Read the house rules and by-laws, especially on short-term rentals.
  8. Gather evidence of achieved rent and calculate a net yield.
  9. Compare transacted prices in the building and nearby.
  10. Visit at different times of day and talk to the management office.

Sources

About the author

Jessica Leong is a Registered Estate Agent (E 3208) with PropNex Realty Sdn Bhd (E (1) 1800/1), KL branch. She covers new launch condos in Kuala Lumpur and Petaling Jaya, industrial property in Selangor, bank auction (lelong) properties, and PJ/Selangor offices, shophouses and en-bloc deals.

PropNex Realty Sdn Bhd, A-G-03, Marc Residence, No. 3, Jalan Pinang, 50400 Kuala Lumpur
Office: 03-2161 8608 · WhatsApp: 010-464 6088
Website: klselangorestates.com

This article is general information based on public sources as at 20 October 2026. It is not financial, legal or tax advice. Figures are from the sources listed and may be revised. Please consult your own lawyer, banker and tax adviser before buying.

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Written by Jessica Leong, Registered Estate Agent E 3208, PropNex Realty Sdn Bhd E (1) 1800/1, A-G-03 Marc Residence, No. 3 Jalan Pinang, 50400 Kuala Lumpur, tel. 03-2161 8608. These articles are general information and market commentary, not financial, legal or tax advice; check the current facts with the relevant authorities and your own advisers before you act.

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