Talking to Property Hub:
Sabah is Okay

We caught up with our friends at Property Hub to get a pulse on the Sabah property market.

“The property industry is down.”

“It’s not a good time for property.”

“No one is buying.”

Why is it that the usual musings of the public when there is a mention of buying property or investing in one is almost always shrouded in pessimism? Is it misinformation, a lack of knowledge, a crowd mentality, commitment anxiety, affordability? Are we simply going to accept it as fact: the property industry is doomed! Hold on a minute, yes the general sentiment has leaned towards the negative side in recent times but it can’t be all bleak and dreadful. Is it even true? There must be hope.

So, with these questions in mind, we headed to the headquarters of our friends at Property Hub Sabah in Bundusan, in hopes that they can give us some insights on the current state of Sabah’s property market. Property Hub achieved a 30% increase in transactions in 2018 and almost 50% increase in transacted value, uncharacteristic of a supposedly spiraling property market.

With that, we dived in headfirst to get a better idea of what’s happening on the ground, from the perspective of real estate professionals:

Juliana Chai, Senior Real Estate Negotiator

Juliana specializes in the medium to high-end segment of residential condominiums and commercial properties in KK, Likas, Luyang and Kolombong areas. To her the market is still very vibrant as there is still a high demand for homes for own use as well as for investment.

“It is obviously a buyer’s market now and for me I think the market is not slow,” Juliana says. She points out that with all the talk of a slow market floating around, now is as good a time as any to look for properties.

“Buy and wait. If you wait and see, by the time you see it you might not have the opportunity to buy.”

Juliana closed a deal that was in the 8-digit bracket in 2018 on a Sabah commercial property, backing the fact that while lower segments of the market may have experienced a slowdown, the demand for properties be it residential or commercial is not only there but is in fact considerable.

Juliana

Juliana

Stephanie

Stephanie

Stephanie Siew, Senior Executive Real Estate Negotiator

Stephanie is one of the founding team members of Property Hub Sabah, she focuses on warehouses, commercial and industrial properties, land and high-end condominiums primarily in the Bundusan, KKIP and Sepanggar areas.

According to Stephanie, the market is still vibrant in the sub-sale sector saying, “The secondary market is still very active, despite all the negative news out there.” The hiccups show up in the lower segment of the market with banks taking a much stauncher stance on loan approvals and where people are more affected by negative sentiments.

Stephanie believes that if you are in a position to buy, do not wait.

“My parents have been waiting for more than 40 years for property prices to come down. Guess what? They are still waiting.”

Stephanie believes that if there’s a will, there’s a way, in any market condition, which is a testament to the confidence of the negotiators at the agency. “My advice, do your own due diligence and search for the property that suits you best. If you have invested in property that is underperforming, you can hold it or convert it for your usage.”

Winnie Ngo, Senior Real Estate Negotiator

Winnie started her real estate journey in 2010, a time when the market was relatively healthy and there was no talk of any crisis. She joined Property Hub Sabah in 2017 and is a specialist in industrial, commercial and high-end sea-view condos. She would know if anything is off in the market but according to her, the market is “normal”.

Interestingly, according to Winnie, commercial properties and warehouses are in high demand in Sabah.  While she does admit people have been cautious when it comes to high-end residential properties, she points out that businesses are snapping up warehouses in Sabah, which was a bit mind-boggling at first but made perfect sense once we understood why.

“Businesses from West Malaysia see Sabah as a new market. They foresee the potential in the state and are keen to tap into the market,” says Winnie, adding, “Demand is good because we lack industrial land and they need factories and warehouses to fabricate and store products.” 

As for the homebuyers, Winnie believes that the mid to low tier properties are stunted by loans that are hard to get, causing transactions to move at a slow pace in the RM400,000 to RM200,000 segment. “It causes everything to drag a lot longer and people are wearier when it comes to loans,” says Winnie, adding that the longer wait also puts the negotiators off.

Winnie

Winnie

Enoch Khoo, CEO of Property Hub Sabah says that he is bullish on 2019 based on the fact that a lot of people in the market is thinking negatively. “The real estate pie in Kota Kinabalu is big, but the people servicing this market is shrinking,” says Enoch, referring to the number of real estate professionals who come into the business only to drop off after a few months. He attributes the success Property Hub has had down to quality not quantity. “For us our system is in place to increase our average. We focus on the per capital income of our RENs, that’s how we measure success.

“In Malaysia the standard for a real estate negotiator to take home is RM80,000 per annum, at Property Hub our average is RM124,000, 50% more than the national average. We don’t need 200 people here.”  

While Property Hub has the single largest office space for an agency in East Malaysia, according to Enoch they are more focused on improving quality, “We have the hardware, it is ready. Now we improve the software.” Leadership, training and investing back into people is the key to Property Hub’s success over the years according to Enoch.

So, is the Sabah property market spiralling? No, not to these professionals. And it is unfair to compare Sabah to the likes of Kuala Lumpur where there is a big overhang issue. Each state has its nuances and while the negative sentiment is not baseless, demand for properties here is as healthy as ever with a few bumps here and there. This is exemplified by the growth experienced at Property Hub. These are people who know the beat of the market, and from what we’ve heard, it seems like opportunities are there, you just need to be prepared to take them. The wait-and-see mentality has to shift, but overall, Sabah is doing okay.

A special thanks to everyone at Property Hub Sabah for being such good sports and sharing time with us.

Enoch (sitting, left) together with his team at Property Hub Sabah

Enoch (sitting, left) together with his team at Property Hub Sabah