This article first appeared in City & Country, The Edge Malaysia Weekly on January 20, 2025 - January 26, 2025

Sabah saw a slowdown in the growth trajectory of its housing market in 3Q2024.

“The Sabah residential property market moderated in 3Q2024, indicated by a lower volume and value of transactions compared with 3Q2023. The state registered 1,114 transactions worth RM457 million, a decrease of 35.35% and 40.91% in volume and value respectively, compared with 3Q2023,” says Rahim & Co regional manager (Sabah) Max Sylver Sintia in presenting The Edge Malaysia | Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2024.

This situation was also reflected in the districts of Kota Kinabalu, Penampang and Putatan.

“The combined adjacent districts of Kota Kinabalu, Penampang and Putatan made up the bulk of the volume of residential property transactions in Sabah in 3Q2024 with 541 transactions, accounting for 48.56% of the total volume of residential property transactions in Sabah. Their value of RM270.89 million represents 59.28% of the total value of residential property transactions in Sabah. Compared with 3Q2023, the number and value of residential property transactions in Kota Kinabalu, Penampang and Putatan decreased by 41.32% and 50.41%, respectively,” he says.

In the quarter under review, the most transacted property type in Sabah was 1-, 2- and 3-storey terraced houses with 423 transactions (37.97% of the total volume of Sabah residential property transactions in 3Q2024) worth RM166.21 million (36.37% of the total value of Sabah residential property transactions in 3Q2024).

This is followed by condominiums and apartments with 267 transactions (23.97% of the total volume) worth RM88.89 million (19.32% of the total value). Next are 1-, 2- and 3-storey semi-detached houses with 170 transactions (15.26% of the total volume) worth RM97.46 million (21.33% of the total value). The number of detached residential properties transacted in 3Q2024 is 77 (6.91% of the total volume) worth RM56.1 million (12.28% of the total value).

This statewide trend was not seen in the conurbation of Kota Kinabalu, Penampang and Putatan where high-rises took the lead with condominiums and apartments recording 191 transactions worth RM73.07 million. This is followed by 1-, 2- and 3-storey terraced houses with 175 transactions worth RM81.2 million. Next were 1-, 2- and 3-storey semi-detached houses with 77 transactions worth RM55.45 million, this was followed by detached properties with 29 transactions worth RM32.27 million, Max reveals.

“Sabah’s property market is anticipated to remain cautiously optimistic for the rest of 2024. The moderate performance of Sabah residential properties in 3Q2024 is most probably a result of the market slowing down its pace in anticipation of new policies and incentives as announced in Budget 2025.

“With a substantial development allocation of RM6.7 billion for Sabah in Budget 2025, the state is poised for significant growth and development. Homeownership incentives, which include the Housing Credit Guarantee Scheme (HCGS), affordable housing initiatives and tax relief for homebuyers, are expected to positively impact home buyers sentiment.”

Max also highlights several other districts in Sabah that have recorded transaction activity. “The next districts with the highest volume of residential property transactions during the quarter under review are the combined districts of Sandakan, Labuk-Sugut, Tungod and Kinabatangan with 235 residential property transactions worth RM74.85 million. Next is the Tawau district with 152 residential property transactions worth RM54.03 million.”

Notable property transactions recorded in 3Q2024 include the purchase of a parcel of vacant development land measuring approximately 10.42 acres located along Jalan Tuaran for RM22.05 million. Meanwhile, a parcel of vacant residential lot in VIP Lot, Jalan Lintas, measuring 36,813 sq ft was sold for a consideration of RM7.5 million or about RM203.73 psf, Max says.

“During the quarter under review, Borneo Kemuncak Riang Sdn Bhd (BKR) launched its 24-storey project located in Jalan Bundusan, known as Boulevard 360 Bundusan. Developed on 9.23 acres, Boulevard 360 Bundusan is a commercial-titled serviced apartment with a total of 1,000 units. The built-up starts at 417 to 435 sq ft. The selling price ranges from RM286,000 to RM338,000 per unit,” he says.

“The 2-storey terraced houses in the monitor recorded an average price growth of 2.66% year on year (y-o-y) in 3Q2024 compared with the same period in 3Q2023 — an increase of 0.02 percentage points,” says Max.

According to Max, the highest y-o-y price growth was recorded in Taman Indah Permai with an increase of 3.16% to RM490,000. This is followed by Ujana Kingfisher (3.1% to RM665,000), Millennium Height (3.08% to RM670,000), Taman Sri Borneo (2.84% to RM725,000), Taman Jindo (2.82% to RM730,000), Luyang Perdana (2.53% to RM810,000) and Golden Hill Garden (1.12% to RM905,000).

Quarter on quarter (q-o-q), Ujana Kingfisher increased by 0.76%, followed by Millennium Height (0.75%), Taman Jindo (0.69%), Taman Sri Borneo (0.69%), Luyang Perdana (0.62%) and Golden Hill Garden (0.56%). There was no q-o-q price growth recorded in Taman Indah Permai.

Rent in Taman Indah Permai improved by 3.23% y-o-y to RM1,600 per month. Ujana Kingfisher recorded a rental growth of 2.56% y-o-y to RM2,000 per month, Taman Sri Borneo (2.44% to RM2,100 per month), Millennium Height (2.38% to RM2,150 per month), Taman Jindo (2.27% to RM2,250 per month), Luyang Perdana (2.08% to RM2,450 per month) and Golden Hill Garden (1.85% to RM2,750 per month). The average y-o-y rental growth for the 2-storey terraced house samples is 4.06%.

Q-o-q, rent in Ujana Kingfisher improved by 2.56%. No rental growth q-o-q was recorded by the others.

The average gross yield was 3.69%. Comparing the gross yield in 3Q2024 with 3Q2023, there is a decrease of 0.01 percentage point.

The highest gross yield was registered at Taman Indah Permai (3.92%). This is followed by Millennium Height (3.85%), Taman Jindo (3.7%), Golden Hill Garden (3.65%), Luyang Perdana (3.63%), Ujana Kingfisher (3.61%) and Taman Sri Borneo (3.48%).

For 1-storey terraced houses, the y-o-y average price growth for 3Q2024 was 3.8%, down from 3.95% recorded in 3Q2023, a decrease of 0.15 percentage points, Max highlights.

The highest y-o-y price growth was recorded in Taman Tuan Huat, at 3.96% to RM525,000, followed by Taman Sri Kepayan (3.74% to RM555,000) and Taman Nelly Ph 9 (3.7% to RM560,000).

Q-o-q, Taman Tuan Huat registered 0.96% growth, Taman Sri Kepayan (0.91%) and Taman Nelly Ph 9 (0.9%).

Rental rates in Taman Tuan Huat improved by 3.13% y-o-y to RM1,650 per month. Taman Nelly Ph 9 recorded an increase of 2.94% rental growth y-o-y to RM1,750 per month and Taman Sri Kepayan with an increase of 2.78% to RM1,850 per month. The average rental growth y-o-y for the 1-storey terraced house samples is 2.95%.

Q-o-q, rental rates for Taman Nelly Ph 9 improved by 2.94%, followed by Taman Sri Kepayan with 2.78% growth. No rental growth q-o-q was recorded in Taman Tuan Huat.

The average gross yield achieved for 1-storey terraced houses was 3.84%, down by 0.03 percentage point compared with 3Q2023.

The highest yield was registered at Taman Sri Kepayan with 4%, followed by Taman Tuan Huat (3.77%) and Taman Nelly Ph 9 (3.75%), Max reveals.

“The condominiums in the monitor recorded an average of 1.09% price growth y-o-y in 3Q2024 which translates into a 0.9% percentage point decrease compared with the average y-o-y growth registered in 3Q2023,” says Max.

Likas Square registered the highest price growth y-o-y, up 3.6% to RM430 psf, followed by Bayshore Condominium (2.7% to RM575 psf), Alam Damai (1.7% to RM615 psf) and The Peak Condominium (0.8% to RM670 psf). However, there were no price movements recorded for Jesselton Condo, Marina Court, 1 Borneo Condominium and Radiant Tower.

Overall, the price for our condominium samples averaged RM549 psf in 3Q2024.

Q-o-q, Likas Square registered a price growth of 1.2%, followed by Alam Damai (0.8%) and The Peak Condominium (0.8%). No q-o-q price growth was recorded for the others.

Rents in Likas Square increased by 2.5% y-o-y (to RM1.52 psf per month). This is followed by Radiant Tower (2.17% to RM1.81 psf per month), Marina Court (1.92% to RM2.04 psf per month) and Jesselton Condo (1.67% to RM2.03 psf per month). There was no rental improvement y-o-y recorded for the others. The average rental growth y-o-y for condominium samples is 1.03%.Rental rates remained the same q-o-q.

Condominium yields, on the other hand, registered an average gross yield of 4.06% which is the same as recorded in 3Q2023.

The highest gross yield for our condominium samples was recorded at 1 Borneo Condominium with 5.06%. This is followed by Radiant Tower (4.34%), Likas Square (4.24%), Marina Court (4.04%), Jesselton Condo (4.03%), Alam Damai (3.73%), The Peak Condominium (3.58%) and Bayshore Condominium (3.48%).

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