KK City Property Market

Published on April 25, 2012 by borneopedia.com

LATEST property market report by C H Williams Talhar & Wong (WTW), a leading real estate services company in Malaysia, says that the rise in prices of landed residential developments in the state capital of Sabah, known previously as Jesselton, is expected to remain unabated.

WTW’s report for 2012 just released to Borneopedia attributes this upward trend in the City of Kota Kinabalu to rising land and building costs, limited supply of new landed housing properties and the fact that the bulk of new developments comprise strata-based properties.

“To cushion escalating house prices, developers are also offering properties further from the city centre and with smaller plot or built-up areas.

“Landed homes at higher prices are beyond the range of most first-time home buyers who would instead be looking at more affordably priced properties like apartments and mid-range condominiums,” the report adds.

The WTW Property Market 2012 report that gives a state by state account of the trends, prices and sentiments on all sectors of the property market in Malaysia.

The WTW market report says that for these reasons the landed residential sector was less active in 2011 as compared with strata-based properties.

However, it points out that rental trends for the landed residential sector in the past year continued to be stable although yield expectations are softening in view of rising house prices.

The WTW market report listed only seven landed residential developments in and around Kota Kinabalu City that are on-going and due for completion between now and 2014.

On-going housing projects

These include the Kubusak Perdana development of 24 units of double-storey terraced units going at RM438,000 per unit and 14 semi-detached units, in Penampang, that are due for completion in 2013.

The 57 units of two-storey terraced houses for Phase 2B of Formosa development at Shantung Villa off Jalan Bundusan, also in Penampang (left), are going at RM668,000 each and due for completion also in 2013.

The third development also within the Penampang district, located south of the capital city, is the Sumudu by Prima where a total of 97 units are being built with a price tag of RM465,000 each, due in 2014.

The remaining four on-going landed residential developments are located all in the northern region of Kota Kinabalu City.

Three of them – the Cerah Phase 6 and 7A, the Green Hill Park, and 15 units of two-and-a-half storey town house villas at Phase 2B of the Kensington Green development going at RM750,000 per unit are located  along the Tuaran By-pass.

The fourth is the Nounton Juta project at Inanam, and all four developments up north are due for completion by 2013.

2012 market forecast

Datuk Chong Choon Kim (right), managing director of WTW’s Sabah operations, told Borneopedia in an interview that based on prices of newly launched properties in the state, property prices as a whole would continue to rise at about 10 per cent, the same rate as that for last year.

He believed that the anticipated billion ringgit investments by Petronas in the oil and gas industry would be a major stimulus to the local economy and would have a positive effect on the property market.

Commenting on recent reports saying that Petronas is planning to pump in about RM45billion worth of investments in Sabah between now and 2015, Chong said this would definitely have a spill-over effect on housing needs in the state.

Contributing factors

“Considering that at least 3,500 new workers are likely to be engaged in these mega projects for locals and foreigners, there would certainly be an increase in housing needs,” he added.

Such positive effect on the property market would not be only confined to the residential sector but on the commercial sector as well, he pointed out, since these new workers are likely to need food, supplies and a wide range of services.

Favourable palm oil prices, presently hovering at around RM3,500 per tonne, is a factor contributing to the upward trend in prices in the Sabah property market.

He reckons the rental market for residential and commercial properties would also be more active.

Chong said another factor that is likely to contribute towards the upward trend in the local property market in Sabah is the favourable palm oil prices that is presently hovering around RM3,500 per tonne.

He believed local planters would continue to have funds to invest in the property market and this would be a factor that contributes towards the upward trend in prices.

WTW, with its head office in Kuala Lumpur, provides a comprehensive range of property services in Sarawak, Brunei and Sabah, through its branches in Kuching, Sibu, Miri, Bintulu, Bandar Seri Begawan, Kota Kinabalu, Sandakan, Tawau, Lahad Datu, Keningau and the federal territory of Labuan.