This article first appeared in City & Country, The Edge Malaysia Weekly on March 18, 2019 - March 24, 2019
Kota Kinabalu’s residential rental market appeared to be trending downwards, albeit with generally stable yields, says Rahim & Co branch manager (Kota Kinabalu) Max Sylver Sintia when presenting The Edge/Rahim & Co Kota Kinabalu Housing Property Monitor for the fourth quarter of 2018 (4Q2018).
“Rents at older condominiums are under pressure due to numerous available options in key areas. Some of the condominiums sampled saw a drop in rents at rates ranging from 1.45% to 5.88%,” says Max.
“It is anticipated that the rental market will remain weak and decline further with more condominiums and apartments nearing completion. Property owners must make more effort to enhance their properties to attract quality tenants. This includes providing better furniture and putting in pleasant decorations.”
Yields were 3.64% to 4.64% for landed residential properties and 3.79% to 5.62% for condominiums.
“Yields are still good, compared with returns from other investments. A lower yield is attributed to the increase in capital values and transaction prices of properties, while lower returns are due to prices that continue to rise faster than rents.
“[Factors such as the] rising cost of construction, scarcity of suitable development land in the capital and inflation have partly contributed to the faster increase in prices,” says Max.
Residential property prices in Kota Kinabalu, meanwhile, are generally still on an upward trend, but the pace is not as fast as before, he says.
“Niche and older development schemes are worth looking into for prospective buyers looking for a good bargain. This includes older stratified and landed developments in the northern and southern outskirts of Kota Kinabalu, in areas such as Menggatal, Tuaran, Petagas, Putatan and Lok Kawi.”
Landed properties sampled during the quarter under review saw year-on-year price growth of 4.55% to 7.02%. Prices for the condominiums sampled grew at rates ranging from 1.2% to 5.2%, except for one sample that registered no growth.
Max says that in 3Q2018, the volume and value of Sabah’s residential property rose despite uncertainties in the global and local economic environment that have weakened consumer sentiment.
Based on National Property Information Centre (NAPIC) figures, he says the transacted volume of residential properties in Sabah increased 18.32% quarter on quarter to 1,279. Compared with 3Q2017, transaction volume in 3Q2018 increased 6.67%.
As at 3Q2018, the total transacted volume of properties in the state for the year was 3,701, up 5.83% compared with the first three quarters of 2017.
In terms of transacted value, Sabah saw RM442.56 million worth of transactions in 3Q2018, a 12.36% increase compared with 2Q2018. However, compared with 3Q2017, transacted value was 1.92% lower, Max says.
The total transacted value of properties in Sabah for 2018 stood at RM1.347 billion as at 3Q2018, up 4.21% compared with the first three quarters of 2017.
Max also notes that most of the properties transacted in Sabah, 57.17% or 731 units, were in Kota Kinabalu, Penampang and Putatan. “The combined value of properties transacted in these three areas was also the highest, contributing 67.42% or RM298.37 million to the total transacted value in the state as at 3Q2018.”
Compared with 1Q2018, the combined transacted volume and value of properties in Kota Kinabalu, Penampang and Putatan in 3Q2018 fell 3.18% and 20.59% respectively, he adds.
Of the total properties transacted in the third quarter, 59.34% (759 units) were priced below RM300,000, some 22.91% (293 units) were priced from RM300,001 to RM500,000, some 14.54% (186 units) cost RM500,001 to RM1 million and 3.21% (41 units) were priced above RM1 million, he says.
2-storey terraced houses
The prices of the 2-storey terraced houses sampled in 4Q2018 grew at an average rate of 5.83% (about RM33,571) year on year.
The highest y-o-y price growth, 7.02% or RM40,000 to RM610,000, was seen at Taman Jindo and Taman
Sri Borneo. This was followed by Luyang Perdana (6.06% to RM700,000), Taman Indah Permai (6.02% to RM440,000), Golden Hill Garden (5.41% to RM780,000),
Ujana Kingfisher (4.72% to RM555,000) and Millenium Height (4.55% to RM575,000).
On a quarter-on-quarter basis, the average price growth of the 2-storey terraced properties sampled was 1.26% or RM7,857.
The best q-o-q growth during the period was seen at Taman Jindo and Taman Sri Borneo, both up 1.67%, followed by Luyang Perdana (1.45%), Golden Hill Garden (1.3%), Taman Indah Permai (1.15%), Ujana Kingfisher (0.91%) and Millenium Height (0.88%).
1-storey terraced houses
In 4Q2018, the 1-storey terraced houses sampled saw an average y-o-y price growth of 6.32% or about RM25,000. Taman Tuan Huat saw the highest y-o-y price growth at 6.85%, up RM25,000 to RM390,000. This was followed by Taman Nelly Phase 9 (6.1% to RM435,000) and Taman Sri Kepayan (6.02% to RM440,000).
Q-o-q, the samples showed an average growth of 1.2% or about RM5,000 in 4Q2018. The best performer was Taman Tuan Huat (1.3%), followed by Taman Nelly Phase 9 (1.16%) and Taman Sri Kepayan (1.15%).
The prices of the condominiums sampled during the quarter under review grew at an average rate of 2.53% y-o-y to RM532 psf.
Bayshore Condominium saw the highest y-o-y price growth, up 5.2% to RM510 psf in 4Q2018. This was followed by Marina Court (5.1% to RM620 psf), The Peak Condominium (3.2% to RM560 psf), Radiant Tower (2.1% to RM480 psf), Alam Damai (1.8% to RM580 psf), Likas Square (1.3% to RM395 psf) and 1Borneo Condominium (1.2% to RM410 psf). Prices at Jesselton Condominium remained unchanged y-o-y at RM610 psf during the period under review.
On a q-o-q basis, prices of condominiums grew 1.11% on average. The highest q-o-q growth was recorded at Bayshore Condominium (2%). This was followed by Marina Court (1.6%), Likas Square (1.3%), 1Borneo Condominium (1.2%), Radiant Tower (1.1%), Alam Damai (0.9%) and The Peak Condominium (0.8%).Q-o-q, prices remained unchanged at Jesselton Condominium.
Rents and yields
Rents for 2-storey terraced houses during the quarter grew at an average rate of 2.99% y-o-y. No q-o-q growth was recorded.
The highest y-o-y growth in rents was seen at Luyang Perdana, at 4.88% to RM2,150 per month. This was followed by Golden Hill Garden (4.08% to RM2,550), Taman Indah Permai (3.57% to RM1,450), Ujana Kingfisher (3.03% to RM1,700), Taman Sri Borneo (2.78% to RM1,850) and Taman Jindo (2.56% to RM2,000). Millenium Height registered no y-o-y growth in rents, which remained at RM1,950.
As for 1-storey terraced houses, rents for the samples recorded an average y-o-y growth of 3.31%. There was no q-o-q growth for the properties during the period under review.
Taman Tuan Huat recorded the highest y-o-y growth in rents in 4Q2018 at 3.57%, or about RM50 to RM1,450 per month. This was followed by Taman Nelly Phase 9 (3.33% to RM1,550) and Taman Sri Kepayan (3.03% to RM1,700).
The average gross yields for 2- and 1-storey terraced houses were 3.84% and 4.46% respectively, down 0.11% and 0.13% from 4Q2017.
The highest gross yield for 2-storey terraced houses sampled during the quarter was seen at Millenium Height at 4.07%, followed by Taman Indah Permai (3.95%), Taman Jindo (3.93%), Golden Hill Garden (3.92%), Luyang Perdana (3.69%), Ujana Kingfisher (3.68%) and Taman Sri Borneo (3.64%).
For 1-storey terraced houses, the best yield was seen at Taman Sri Kepayan at 4.64%, followed by Taman Tuan Huat (4.46%) and Taman Nelly Phase 9 (4.28%).
For condominiums, Max says the high-rises sampled saw a drop in monthly rents on a y-o-y basis. They include Marina Court, which saw a 1.45% drop to RM2.62 psf, Radiant Tower (4.17% to RM1.77 psf), 1Borneo Condominium (5% to RM1.92 psf) and Alam Damai (5.88% to RM2.18 psf).
The two condominiums that saw a y-o-y increase in rents during the quarter were Likas Square (2.22% to RM1.70 psf) and Bayshore Condominium (1.75% to RM1.61 psf). Prices at Jesselton Condominium and The Peak Condominium remained unchanged y-o-y at RM2.43 psf and RM2.69 psf respectively.
On a q-o-q basis, no growth in rents was recorded. Rather, a decline was noted at The Peak Condominium (1.41%), Marina Court (2.86%), 1Borneo Condominium (5%), Alam Damai (5.88%) and Radiant Tower (6.12%). No change in rents was seen at Jesselton Condominium and Bayshore Condominium on a q-o-q basis.
The average gross yield for condominiums in 4Q2018 was 4.79%, down 0.2% compared with 4Q2017.
1Borneo Condominium had the best average gross yield at 5.62% during the period. This was followed by Likas Square (5.18%), Marina Court (5.06%), The Peak Condominium (4.97%), Jesselton Condominium (4.79%), Alam Damai (4.51%), Radiant Tower (4.42%) and Bayshore Condominium (3.79%).
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