KUALA LUMPUR (April 28): Sabah’s property market continued to remain soft in 2014. The state recorded 8,926 transactions with a total value of RM4.36 billion compared with 9,116 transactions worth RM4.71 billion previously, according to the “Property Market Report 2014” by the National Property Information Centre (Napic). Volume and value were down 2.1% and 7.4% respectively.
“Sabah’s property market has slowed as a result of nationwide cooling measures. In particular, unfavourable lending conditions have had a significant impact on the ability of investors to purchase properties. The implementation of GST earlier this month has also placed development launches on the backburner,” said Ginn Lai, associate director of Knight Frank Sabah.
In 2014, market activity across all sub-sectors in Sabah was mixed. The state’s commercial, industrial and agricultural sub-sectors rose by 8.1%, 2.8% and 0.4% respectively, while the residential and development land sub-sectors declined 5.0% and 5.5% respectively. In terms of value, residential and commercial sub-sectors witnessed growth of 6.7% and 5.8% respectively, stated the report.
“We don’t believe the slowdown in the Sabah market should be viewed negatively. The state has experienced rapid growth over the last five years and in many cases, we are only seeing completions of landmark developments now. The market will take time to consolidate and for properties across all sectors to mature [and be occupied] residents and tenants,” said Lai.
Nevertheless, residential property prices remained stable, with some movements in selected districts. Residential schemes in the vicinity of Kota Kinabalu, such as the state government administrative centre, University Malaysia Sabah, University Teknologi Mara, Politeknik Kota Kinabalu and Kota Kinabalu International Airport all recorded capital gains.
In terms of rental, the state’s residential sub-sector was generally stable. Double-storey terraced properties in Kota Kinabalu registered a higher rental range of between RM650 and RM1,500 a month.
The state’s primary market recorded 2,812 units of new launches in 2014 compared with 2013 (1,380 units), mostly comprising condominium and apartment launches. Sales performance increased to 56.1% in 2014 compared with 40% in 2013.
“Sabah’s property market has immense long-term upside. Recent completions of Imago Mall and The Loft apartments, Oceanus Mall and the soon-to-be-completed Riverson and Gleneagles private hospitals have modernised the southern corridor of Kota Kinabalu,” says Lai.
“There is a noticeable increase in oil and gas companies relocating or expanding in Sabah with expatriate staff. Tourism in Sabah is one of the most exciting sectors and we are encouraged by the growing interest in hospitality products and hotels by international operators and investors.
“As Sabah’s infrastructure continues to develop, we believe foreign investment will propel the property market. This is a segment of consumers that currently makes up less than 5% of transactions so the upside is enormous.”
The state’s property market outlook for 2015 is expected to be sustained next year. Upcoming projects in Kota Kinabalu include Pelagos Designer Suites, Jesselton Residences and The Loft. The construction of the Pan-Borneo Highway is expected to have a positive spill-over effect on properties located near it.
“We foresee increased foreign purchasing as Sabah continues to create regional interest, and [buyers] offshore will capitalise on the weak ringgit. The interest in land acquisition by multinational companies for future development is also something we believe will uptrend in the year ahead,” said Lai.
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