We are sitting on land where thousands of new homes can be built, yet we are not doing anything with it.
From Idzham Mohd Hashim
Malaysia holds an estimated 30,000ha of waqf land, roughly three times the land area of Putrajaya, donated over generations and held in perpetual trust for the public good.
Researchers have conservatively valued these holdings at RM4 billion, a figure that dates back to 2015.
The Department of Awkaf, Zakat and Hajj (Jawhar) confirmed in July 2023 that of 18,402 registered waqf lots nationally, approximately one in six remains unproductive or underdeveloped. Broader estimates put undeveloped land area at up to 87% of the total.
Against this sits a housing crisis that is worsening by the year. The average Malaysian home costs RM475,126, roughly double the price a decade ago. Household debt stands at 84.2% of gross domestic product (GDP), with housing loans accounting for 60.5% of all personal borrowings.
Close to six in 10 home loan applications from B40 and lower M40 households are rejected outright. We hold land worth billions of ringgit in public trust, while families are priced out of home ownership.
The reason these two realities are not resolving each other is a legislative gap, not a shortage of land, capital or demand.
The problem is not the principle
Waqf is a form of Islamic charitable endowment. A donor irrevocably transfers land to the public benefit, in perpetuity, administered by each state’s Islamic religious council.
It can never be sold or alienated. That restriction is the source of waqf’s enduring value. It is also what has rendered most of it economically inert.
Banks lend against collateral they can, in the event of default, recover and sell. Waqf land cannot be sold. So banks decline to finance buyers, developers decline to build, and the land sits idle.
The waqf principle is not the obstacle. The absence of a mechanism to separate perpetual ownership from transferable economic rights is. The title stays with state religious councils forever, as it should.
What the market needs is a legally recognised structure through which the right to develop, occupy and finance what is built on that land can be granted to private parties for a defined, long-term period.
The architecture already exists
The solution requires no new law to be invented. Malaysia already operates long-term lease structures over master-held land in various parts of the country.
In one such arrangement operating in Johor, a master title holder never alienates ownership while developers build and sell registered leasehold interests, typically 99 years, to end-buyers who acquire long-term, bankable possession.
In June 2025, the Court of Appeal affirmed that such arrangements are fully consistent with the National Land Code and the Strata Titles Act. Academic researchers have identified at least three distinct variants of this structure operating legally in Malaysia today, without any statutory amendment.
The gap is not in existing law. It is in the absence of a nationally standardised provision extending this certainty specifically to waqf land, giving commercial lenders across all states the confidence to treat long-term waqf leases as bankable collateral.
Two practical outcomes
On waqf am, or general waqf, land, the most immediate application is affordable housing. Land acquisition is the single largest cost in Malaysian property development, and it is passed directly to buyers.
On waqf land, that cost is removed entirely. A developer engages on a lease basis, builds homes, and markets 99-year interests at prices reflecting construction economics rather than land.
Our 12th Malaysia Plan targeted 500,000 affordable homes; as of September 2024, the shortfall stood at more than 56,000 units with no credible delivery path.
Waqf am land, properly legislated, is a structural solution rather than a subsidy.
On waqf khas, or specific waqf, land, the same model transforms chronically underfunded community assets. A mosque endowed on waqf land as the anchor of a mixed-use development, can have its construction and operating costs funded in perpetuity by ring-fenced lease and rental income from adjacent residential and commercial lots.
This was the organising logic of Islamic urban development for centuries. It is not a new idea. It requires modern legislative tools to implement.
Singapore has already shown the way
Warees Investments, the property arm of Singapore’s Islamic religious council, manages more than 150 wakaf properties with the discipline of a professional real estate firm.
In one documented case, a waqf asset valued at S$800,000 appreciated to over S$71 million within a decade. Malaysia holds far more waqf land by area.
What Singapore has that we do not is a legislative framework enabling professional management. That framework can be built here, and it requires one thing: an amendment to the National Land Code.
The ask is narrow. The return is not
Parliament does not need to create a new institution, a new fund or a new spending programme. It needs to incorporate a standardised waqf lease framework into the National Land Code, one that authorises state Islamic bodies to grant long-term registered leases, defines how those leases function as collateral, and gives every party in the transaction the certainty to proceed.
The judicial precedent is in place. The commercial evidence is in place. The international proof of concept is in place. What remains absent is the political commitment to codify them.
Leaving 87% of waqf land idle is a policy failure, one that is costing ordinary Malaysians their most credible remaining pathway to home ownership.
The land exists. The legal template exists. It is time for the National Land Code to catch up. - FMT
Idzham Mohd Hashim is a real estate practitioner specialising in large-scale development, private equity and real estate finance.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
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