Property prices in Sabah is likely to head for a gradual decline if the current economic trend persists, coupled with stricter bank loan approvals, said C.H. Williams, Talhar & Wong (Sabah) Sdn Bhd director Sr Cornelius Koh.

"A five to 10 per cent decline is a fair estimate. It will not be a total crash of the market where people can buy properties at half of the original price because the population is always growing in Kota Kinabalu. There is always demand for housing, as well as commercial and office properties" he said.

In an interview, Koh said the volume of transactions has been on a downward trend for the past two years.

"My personal view is that people are still able to hold on (to their properties), even when times are hard. There is bound to be property owners who will sell in desperation.”

Additionally, Koh said developers are hitting the brakes in new project launches, even for developments that have been approved by the authorities. Some developers launch their projects in phases instead, whereas some others get potential buyers to register their interests in the property products to gauge the response in order to decide whether to go ahead with the launch.

"These are indications that the developers have sensed that the market is not as bullish as before.”

Property purchase a long shot for many youngsters. In light of the increasing property prices, some parents are buying residential properties for their children.

Koh said property prices in Kota Kinabalu have doubled in recent years.

"Between five to eight years ago, an intermediate terrace house cost RM200,000 to RM300,000, now it is priced close to RM1 million.

"The newly-launched semi-detached houses are over RM1 million per unit compared to RM500,000 or RM600,000 back then.”

The price of apartments that previously cost RM100 per square feet (psf) are now more than RM300 psf, such as Cyber City Apartments.

In fact, Koh said the pricing for apartments was the figure the company adopted to value condominiums eight years ago.

Condominiums have also soared to RM800 psf from RM300 psf years ago.

"Properties like The Peak of Peak SOHO have reached RM1,000 psf already.

"If you are a parent, you will start thinking what will happen to your children in time to come.”

Koh said parents will buy properties for their children if they can afford it, or if they are able to secure bank loan because it will be cheaper for their next generation in the long run.

On a similar note, he said many households earning RM3,000 to RM5,000 could not afford to buy the so-called affordable housing after banks take into account their financial obligations such as car loans.

"That's why a lot of applicants look like they qualify for bank loan but in reality, many of them are rejected.”

For people who shoulder huge financial burden, they will not be able to afford even a RM100,000 house.

"So affordable or not affordable does not really show a clear picture of what is really happening in the market" he said. Property value in KK will continue to rise. Despite the fluctuations, Koh said property prices will always be on the rise in the long run.

While a layperson sees no logic in spending millions to buy a two or three-storey shop, a property investor will not hesitate to fork out the money if they are convinced the property has potential for capital growth, he said.

"Ten years ago, it was hard to believe that a condominium can sell for RM1 million in KK. Now a lot of condominiums are fetching RM1 million. Where is the logic in it? There is no compound, there is no land, but people are buying.

"The truth is that there is no logic. People invest in property because they know that one way or another, they are bound to make money when the value goes up.”

Also present at the interview was associate director Sr Chan Mon Hueg @ Moon.