This article first appeared in City & Country, The Edge Malaysia Weekly on July 21, 2025 - July 27, 2025

Despite the year-on-year (y-o-y) decline in residential property transaction volume and value in 1Q2025, marginal growth is expected this year. “There will be some normalisation in the market. Growth in the property market will gradually move towards a more stable and positive trajectory, influenced by evolving economic conditions and buyer preferences,” says Rahim & Co International Sdn Bhd’s Kota Kinabalu director Max Sylver Sintia in presenting The Edge Malaysia | Rahim & Co Kota Kinabalu Housing Property Monitor 1Q2025.

“Demand for affordable houses, particularly those priced below RM500,000, is expected to continue to dominate the market, especially for first-time homebuyers and owner-occupiers. We observe that buyers were actively enquiring about properties during the quarter and we expect the transaction activity to only be seen in the third or fourth quarter of 2025.” 

Max attributes this to favourable economic factors, government initiatives and catalytic developments that are expected to sustain market sentiment and momentum across the broader property market in Sabah.

“In 1Q2025, Sabah recorded RM10.9 billion worth of approved investments, with foreign direct investments contributing RM6.6 billion or 61%, while domestic direct investments accounted for RM4.29 billion or 39%. This indicates continued investor confidence in Sabah and signifies a positive outlook for the state’s property market,” he says.

Max points out that government policies such as Sabah’s People Housing Scheme (SRRS), which is specifically offered to Sabahans, will drive the demand for affordable residential properties. “The key features of SRRS, which was launched in January, include 100% financing, lower and fixed interest rates as well as no repayment during the construction period,” he adds.

Meanwhile, the Sabah-MM2H (Malaysia My Second Home) programme — launched in December 2024 — is anticipated to be a positive catalyst for the state’s property market as it will attract foreign investments as well as stimulate demand, says Max.

Sabah’s residential property market recorded 1,349 transactions (-6.06% y-o-y) in 1Q2025, valued at RM548.08 million (-7.09% y-o-y). Quarter on quarter (q-o-q), the residential transaction volume and value decreased by 14.78% and 18.53% respectively.

Residential properties priced below RM300,000 dominated transactions in the market, with 675 transactions worth RM131.57 million during the quarter in review. This was followed by residential properties in the price brackets of RM300,001 to RM500,000 (390 transactions; RM151.73 million), RM500,001 to RM1 million (216 transactions; RM144.4 million) and above RM1 million (68 transactions; RM120.38 million).

In terms of property types, 1- , 2- and 3-storey terraced houses saw the most transactions, with 490 transactions worth RM183.35 million. This was followed by condominiums and apartments (397 transactions; RM135.38 million), 1-, 2- and 3-storey semi-detached houses (153 transactions; RM100.48 million) and detached residential properties (80 transactions; RM65.14 million).

The adjacent districts of Kota Kinabalu, Penampang and Putatan made up the bulk of the volume in residential property transactions in Sabah in 1Q2025, with 758 transactions worth RM373.35 million.

“Compared with 1Q2024, the number of residential property transactions in Kota Kinabalu, Penampang and Putatan increased by 0.66%. However, the value of transactions decreased by 1.45%,” says Max.

The property type that saw the most transactions in this conurbation in 1Q2025 was condominiums and apartments, with 288 transactions worth RM113.06 million. This was followed by 1-, 2- and 3-storey terraced houses (252 transactions; RM117.55 million), 1-, 2- and 3-storey semi-detached houses (86 transactions; RM72.03 million) and detached houses (65 transactions; RM58.08 million).

“The next district with the highest volume of residential property transactions during the quarter in review was the Tawau district with 161 residential property transactions worth RM51.33 million. This was followed by the districts of Sandakan, Labuk-Sugut, Tungod and Kinabatangan with 140 residential property transactions worth RM29.92 million,” he says.

“The 2-storey terraced houses sampled for the monitor recorded an average price growth of 2.33% y-o-y in 1Q2025, a marginal decline of 0.036 percentage point,” says Max.

The highest y-o-y price growth was observed in Ujana Kingfisher, with an increase of 3.05% to RM675,000. This was followed by Millenium Height (3.03% to RM680,000), Taman Sri Borneo (2.8% to RM735,000), Taman Jindo (2.78% to RM740,000), Luyang Perdana (2.5% to RM820,000), Golden Hill Garden (1.11% to RM910,000) and Taman Indah Permai (1.03% to RM490,000).

Q-o-q, Ujana Kingfisher rose by 0.75%, followed by Millenium Height (+0.74%), Taman Sri Borneo (+0.68%), Taman Jindo (+0.68%) and Luyang Perdana (+0.61%). No price growth was recorded for Golden Hill Garden and Taman Indah Permai in 1Q2025.

In terms of rental performance, Taman Indah Permai posted a 3.23% y-o-y increase to RM1,600 per month, Ujana Kingfisher 2.56% y-o-y to RM2,000, Taman Sri Borneo 2.44% y-o-y to RM2,100, Millenium Height 2.38% y-o-y to RM2,150, Taman Jindo 2.27% y-o-y to RM2,250, Luyang Perdana 2.08% y-o-y to RM2,450 and Golden Hill Garden 1.85% y-o-y to RM2,750.

The average y-o-y rental growth for the 2-storey terraced houses sampled was 2.4%. No q-o-q rental growth was recorded for these samples.

The average gross yield for the quarter in review remained at 3.65%, unchanged from 1Q2024. The highest yield was recorded at Taman Indah Permai (3.92%), followed by Millenium Height (3.79%), Taman Jindo (3.65%), Golden Hill Garden (3.63%), Luyang Perdana (3.59%), Ujana Kingfisher (3.56%) and Taman Sri Borneo (3.45%).

For the 1-storey terraced houses sampled, price growth stood at 3.73% y-o-y for the quarter, down from 3.87% in 1Q2024 — a decrease of 0.14 percentage point. Taman Tuan Huat recorded the highest price growth of 3.88% y-o-y to RM535,000, followed by Taman Sri Kepayan (3.67% y-o-y to RM565,000) and Taman Nelly Ph 9 (3.64% y-o-y to RM570,000).

On a quarterly basis, Taman Tuan Huat registered a price growth of 0.94% q-o-q, followed by Taman Sri Kepayan (0.89% q-o-q) and Taman Nelly Ph 9 (0.88% q-o-q).

In terms of rental performance, Taman Tuan Huat recorded a growth of 3.03% y-o-y to RM1,700 a month, Taman Nelly Ph 9 2.94% y-o-y to RM1,750 and Taman Sri Kepayan 2.78% y-o-y to RM1,850. The average rental growth for this segment was 2.92% y-o-y. No q-o-q rental growth was observed.

In terms of yield, the average gross yield for 1-storey terraced houses was 3.81%, a slight decline of 0.03 percentage point from 1Q2024. Taman Sri Kepayan registered the highest yield at 3.96%, followed by Taman Tuan Huat (3.81%) and Taman Nelly Ph 9 (3.68%).

Condominiums sampled in the monitor saw an average price growth of 1.53% y-o-y in 1Q2025, reflecting a slight decline of 0.09 percentage point from 1Q2024.

Likas Square posted the highest growth at 4.8% y-o-y to RM440 psf, followed by Alam Damai (2.5% y-o-y to RM620 psf), The Peak Condominium (2.3% y-o-y to RM680 psf), Bayshore Condominium (1.8% y-o-y to RM580 psf) and Radiant Tower (1% y-o-y to RM505 psf).

No price growth was recorded for Jesselton Condo, Marina Court and 1 Borneo Condominium. Overall, the average condominium price was RM554 psf in 1Q2025.

On a quarterly basis, Likas Square saw a price increase of 1.1% q-o-q, followed by Alam Damai (0.8% q-o-q) and The Peak Condominium (0.7% q-o-q). No q-o-q price growth was recorded for the other samples.

Among the condominiums, 1 Borneo Condominium led rental growth with a 3.03% y-o-y increase to RM1.72 psf per month. This was followed by Likas Square (2.44% y-o-y to RM1.56 psf), Alam Damai (2.38% y-o-y to RM1.95 psf), Radiant Tower (2.13% y-o-y to RM1.85 psf), The Peak Condominium (1.92% y-o-y to RM2.04 psf), Marina Court (1.89% y-o-y to RM2.08 psf), Bayshore Condominium (1.67% y-o-y to RM1.69 psf) and Jesselton Condo (1.64% y-o-y to RM2.07 psf).

The average y-o-y rental growth for the condominium samples was 2.14%. No q-o-q rental growth was recorded.

Condominiums recorded an average gross yield of 4.12%, reflecting a 0.03 percentage point increase from 1Q2024. The highest gross yield was seen at 1 Borneo Condominium (5.22%), followed by Radiant Tower (4.39%), Likas Square (4.24%), Marina Court (4.12%), Jesselton Condo (4.1%), Alam Damai (3.78%), The Peak Condominium (3.6%) and Bayshore Condominium (3.51%).

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