Kota Kinabalu, the capital city of Sabah, Malaysia was one of the country’s most visited destinations prior to the pandemic. In 2019, Sabah hit a record number of 4,195,903 tourist arrivals mainly coming from China, South Korea and Hong Kong. When the pandemic hit in 2020 and borders closed, naturally the property market plummeted and according to Sabah Housing and Real Estate Developers Association (SHAREDA) president, Datuk Chew Sang Hai said that the market hit rock bottom in both transactions volume and value.
In an article published by Edgeprop.my, KK-based IQI real estate agent Abbey Tan reported a significant drop in enquiries for homes last year.
There was pressure especially on high rise developments as expatriates and non-native KK dwellers moved out of the city. This caused a drop in asking prices for high-rise units by 10% to 20%.
The asking prices for landed properties also declined by 5% to 10% in the outskirts of the city, while the matured areas remained intact.
- double-storey houses are on the market at an average of RM650,000 to RM800,000
- semi detached units are going for between RM1 million and RM1.5 million.
- bungalows are asking for an average price of RM3.88 million or RM647 psf.
- condominiums and serviced apartments have an average asking price of RM720,000 or RM584 psf.
- the average monthly rental rate for semi detached averaged RM2,733 or RM1.29 psf
- bungalow’s average monthly asking rental stood at RM2,500 or RM1.04 psf
- And average monthly rental for high-rise residential is RM2,207 or RM1.95 psf.
Vacation Homes in KK as Investment Choice
Knight Frank Malaysia (Sabah branch) executive director Chen Yun Ngen tells EdgeProp.my that while KK properties are not cheap for its rental yield, compared to West Malaysia, the tourism factor and the current weak market offer an opportunity for one to invest in a KK vacation home.
“We have homes offering great sea or mountain views, situated near a golf course within a resort. These are unique selling points that are hardly available elsewhere,” adds Chen.
Connected and accessible
Good accessibility is a top consideration for property investors. Thus there is much anticipation of positive spin-offs upon completion of the now under-construction Pan Borneo Highway, which will open up a big tract further east, going through Putatan, right up to Sepanggar.
Pan Borneo Highway. Photo credit: 爱斗湖 Love Tawau
The market has also been abuzz with the recent news that the Tanjung Aru Eco Development project has attracted the interest of Hong Kong-based CRCC International Investment Group Ltd.
Besides these mega infrastructure developments, Chen’s optimism is also fuelled by the relocation of Indonesia’s state capital from Jakarta to East Kalimantan, which is currently under development.
“Obviously, we take it as an advantage because they would need a lot of supply, expertise and materials, and we (Sabah) are so near to them. We (Sabah) can be a regional hub,” Chen concludes.