The Edge / Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2022: KK high-rise transactions beat landed homes

This article first appeared in City & Country, The Edge Malaysia Weekly, on January 16, 2023 - January 22, 2023.
 The Edge / Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2022: KK high-rise transactions beat landed homes

 The Edge / Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2022: KK high-rise transactions beat landed homes

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In presenting the The Edge / Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2022, Rahim & Co regional manager (Sabah) Max Sylver Sintia says high-rise units in the Kota Kinabalu, Penampang and Putatan conurbation outsold terraced houses.

“The most transacted types of residential properties in Kota Kinabalu, Penampang and Putatan in 3Q2022 were condominiums and apartments with 301 transactions worth RM94.6 million. This was followed by terraced houses with 248 transactions worth RM119.65 million and then by semi-detached houses with 179 transactions worth RM68.9 million,” he says.

Overall, Sabah’s landed properties, particularly terraced houses, dominated, followed by high-rises and semi-detached houses.

“The most transacted types of residential properties in Sabah in 3Q2022 were terraced houses with 594 transactions worth RM229.14 million. This was followed by condominiums and apartments with 395 transactions worth RM107.47 million, and semi-detached houses with 179 transactions worth RM105.06 million.

Max highlights that in the third quarter of last year, the state registered 1,594 residential transactions worth RM638.22 million, representing a year-on-year (y-o-y) growth of 30.87% in volume and 34.6% in value.

Max: Moving forward, we anticipate a stronger market recovery for the residential property market in Sabah. [However,] rising building material costs and labour shortages have been contributing to the rise in development construction costs. (Photo by Rahim & CO)

For the quarter under review, properties priced below RM300,000 had the highest number of transactions with 807 units sold, valued at RM157.97 million. This was followed by residential properties in the price range of RM300,001 to RM500,000 (433 transactions worth RM171.58 million); RM500,001 to RM1 million (210 transactions worth RM197.8 million) and above RM1 million (67 transactions worth RM110.87 million).

The KK conurbation accounted for the bulk of residential property volume in 3Q2022 with 786 transactions (49.31% of residential property transactions) worth RM398.77 million (62.48% of total value).

“Compared to 3Q2021, the number and value of residential property transactions in Kota Kinabalu, Penampang and Putatan had increased by 16.44% and 25.79% respectively,” says Max.

Meanwhile, there were several land transactions in the third quarter. Among them was a 0.525-acre residential plot in Shangrila Estate, Kota Kinabalu, that was sold for RM4.15 million or RM181 psf.

“Other notable [land] transactions recorded in 3Q2022 included the purchase of agricultural land cultivated with oil palm with a total land area of approximately 202.146ha in Pegagau, Semporna, by Borneo Samudera Sdn Bhd. It was sold for RM23 million.

“Meanwhile, BL Plantation Sdn Bhd also purchased agricultural land cultivated with oil palm with a land area of about 200.238ha in Ulu Segama, Lahad Datu, for RM18.307 million,” says Max.

On the other hand, a few industrial land transactions were recorded in 3Q2022. These included the acquisition of an 18.86ha parcel on Jalan Tuaran, Kota Kinabalu, by C-Care Enterprise Sdn Bhd for RM25 million, the purchase by ST Land Sdn Bhd of a detached industrial building with a land area of about 1.529ha located in Sedco Industrial Estate, Kolombong, for RM18 million, and the acquisition by Lux Auto World Sdn Bhd of a parcel of development land measuring about 4.14 acres along Jalan Sulaman, Kota Kinabalu, for RM15 million.

Meanwhile, as the tourism sector in Sabah is gaining momentum with 1.19 million visitor arrivals recorded in 3Q2022 in comparison to 136,390 in 3Q2021, Max believes it will have a positive impact on the property market, not only in the hotel sector but also in residential and commercial properties.

“Housing demand increases in tourist areas, due to companies and workers increasing to cater to the recovering tourism market, will positively affect house prices. Also impacting the demand for houses is [the revival of] the short-term rental [market] as seen before the pandemic. Commercial properties will also be in demand, not only for shops but also for hotels,” he explains.

“Moving forward, we anticipate a stronger market recovery for the residential property market in Sabah. [However,] rising building material costs, supply chain constraints and labour shortages have been contributing to the rise in development construction costs,” says Max.

Improved value for 2-storey terraced houses

“The 2-storey terraced houses in the monitor recorded an average price growth of 1.96% y-o-y in 3Q2022 compared with the same period in 2021, which saw a 1.92% y-o-y growth — a slight increase of 0.04 percentage points (ppt).”

The highest y-o-y price growth for 2-storey terraced houses was recorded at Ujana Kingfisher, at 3.31% to RM625,000. This was followed by Taman Sri Borneo (3.01% to RM685,000), Taman Jindo (2.96% to RM695,000), Golden Hill Garden (2.34% to RM875,000), Luyang Perdana (1.32% to RM770,000) and Millenium Height (0.8% to RM630,000). The price of Taman Indah Permai homes remained unchanged.

Rent-wise, homes in Luyang Perdana improved by 4.55% y-o-y to RM2,300 per month. Ujana Kingfisher recorded rental growth of 2.86% y-o-y to RM1,800 per month, Taman Sri Borneo (2.63% to RM1,950 per month), Taman Jindo (2.38% to RM2,150 per month) and Golden Hill Garden (1.92% to RM2,650 per month). Rental for Taman Indah Permai and Millenium Height houses remained at RM1,500 and RM2,000 per month respectively, Max says.

“For 2-storey terraced houses, the average gross yield for the quarter under review remained the same as 3Q2021 at 3.64%,” says Max.

Steady performance for 1-storey terraced houses

The steadiest performer has been 1-storey terraced houses, which performed well both in price growth and rents.

“For the 1-storey terraced houses, the y-o-y price growth for the quarter in review was 4.11%, up from 3.57% in 2Q2021, a slight increase of 0.54 ppt,” he says.

The highest y-o-y price growth was at Taman Tuan Huat, with an increase of 4.3% to RM485,000, followed by Taman Sri Kepayan (4.04% to RM515,000) and Taman Nelly Ph 9 (4% to RM520,000).

Rents at Taman Tun Huat and Taman Nelly Ph 9 improved y-o-y by 3.33% (to RM1,550 per month) and 3.13% (to RM1,650 per month) respectively. Rents in Taman Sri Kepayan remained at RM1,750 per month.

“Average gross yield achieved for 1-storey terraced houses was 3.91%, down by 0.08 ppt compared to 3Q2021,” says Max.

Reversal of fortunes for high-rise segment

The value of the high-rises have grown over the past few quarters.

“The condominiums in the monitor recorded an average price growth of 2.03% y-o-y in 3Q2022, which translates into an increase of 1.92 ppt compared to the average y-o-y growth registered in 3Q2021,” says Max.

Likas Square registered the highest y-o-y price growth of 3.8% to RM405 psf, followed by Jesselton Condominium (3.4% to RM600 psf), 1 Borneo Condominium (2.7% to RM380 psf), Alam Damai (2.6% to RM590 psf), Bayshore Condominium (1.9% to RM545 psf), Radiant Tower (1% to RM495 psf) and The Peak Condominium (0.8% to RM655 psf). Marina Court’s average price remained at RM600 psf.

“Overall, the price for our condominium samples averaged RM534 psf in 3Q2022,” says Max.

Rents held steady across the board except for Alam Damai units, which improved by 11.11% y-o-y to RM1.82 psf per month and for Jesselton Condominium, which increased by 3.45% y-o-y to RM2.00 psf per month.

Max says that other high-rise rents held steady with Marina Court at RM2.00 psf per month, Bayshore Condominium at RM1.61 psf per month, 1 Borneo Condominium at RM1.62 psf per month, Likas Square at RM1.48 psf per month, Radiant Tower at RM1.77 psf per month and The Peak Condominium at RM2.00 psf per month.

“Condo yields registered an average gross yield of 4.09%, a slight decrease of 0.02 ppt compared to the average yield recorded in 3Q2021,” he says.