Weakened ringgit draws foreign interest to Kota Kinabalu: Knight Frank

KUALA LUMPUR (Aug 12): The weakened ringgit has spurred increased interest from foreign buyers in Kota Kinabalu’s property market, particularly for luxury properties priced at RM1,000 psf and above, and prime land in the city area, according to Knight Frank Malaysia Real Estate Highlights 1H2015.

“The ringgit’s continuing slide against worldwide currency baskets is likely to attract a significant amount of foreign investment for the right properties and land during the second half of the year,” says Knight Frank.

It believes that this trend will continue with the entry of more new projects that meet the requirements of foreign investors.

New launches of mixed-use products at the old Jesselton Port area are anticipated in 2H2015. Its waterfront location and the growing appeal of its prime properties to offshore buyers should attract high-net-worth domestic investors and regional foreign investors, and ensure some sales momentum.

Based on the Valuation and Property Services Department’s Property Market Report 2014, there was a total of 8,926 transactions in Sabah in 2014 worth RM4.357 billion, down 2% from 2013. Some 80.2% of total transactions were priced below RM500,000 and only 6.7% were priced at RM1 million and above.

Most of the transactions were in the residential sub-sector, with a total transacted value of circa RM1.615 billion or about 37.1% of the overall market value.

Meanwhile, the industrial sector was the least active, contributing a total transacted value of about RM340 million or 7.8%.

Knight Frank remains optimistic on the overall Kota Kinabalu property market in the medium to long term and expects it to remain stable in terms of values. However, it expects transaction volumes to remain low until lending conditions improve. It notes that this is also reflective of the diminished new supply.

“The consolidation and lull in the market is being felt regionally. However, we expect a strong rebound as investment conditions improve,” says Knight Frank in the report.