This article first appeared in City & Country, The Edge Malaysia Weekly on April 27, 2026 - May 3, 2026

Sabah’s residential market ended 2025 with a clearer divide emerging between the homes people are buying and the homes developers are building. While most transactions in Sabah continued to take place in the sub-RM500,000 segment in 4Q2025, several of the new launches were aimed at higher-income buyers, underscoring the increasingly split nature of the market.

“While there are premium projects being launched, the volume-driven part of the market remains firmly within the affordable and mid-market segments. That is where most of the actual buying activity is taking place,” says Rahim & Co Chestertons’ Kota Kinabalu director, Max Sylver Sintia, in presenting The Edge Malaysia | Rahim & Co Chestertons Kota Kinabalu Housing Property Monitor 4Q2025.

In the quarter under review, Sabah recorded 1,474 residential transactions worth RM630.74 million. Although this was lower than a year earlier, activity picked up from 3Q2025, suggesting that buyer demand remained intact despite a more cautious market environment.

Affordable homes priced below RM300,000 remained the single largest segment, accounting for 44.9% of all residential transactions, while another 30.6% involved homes priced between RM300,001 and RM500,000.

Together, these two price bands made up more than three-quarters of all deals, reinforcing that affordability continues to be the defining factor of Sabah’s housing market.

Yet the quarter also saw the launch of projects such as Arus Nova in Tanjung Aru, where units are priced at up to RM1.063 million or RM1,400 psf.

Landed residential properties continued to anchor the market in 4Q2025, with terraced houses remaining Sabah’s most actively transacted residential product, recording 531 transactions worth RM217.49 million in the quarter alone. These represented 36% of total residential transaction volume and 34.5% of value.

Condominiums and apartments followed, with 406 transactions worth RM143 million, while semi-detached and detached houses registered 172 and 105 transactions respectively.

Rahim & Co Chestertons points out that the concentration of demand in terraced homes reflects continued preference among owner-occupiers for landed housing, especially in established and suburban neighbourhoods, where affordability remains more manageable.

This trend was also evident in the Kota Kinabalu, Penampang and Putatan districts, which together accounted for 806 transactions worth RM414.16 million, or almost 55% of Sabah’s total residential transaction volume.

Within these districts, condominiums and apartments were the most transacted category at 274 deals, narrowly ahead of terraced houses at 232 transactions. The prominence of high-rise housing in Greater Kota Kinabalu reflects the city’s more urbanised housing profile and limited availability of landed residential land.

Meanwhile, the secondary market for landed homes in Kota Kinabalu also continued to show firmer price growth than the condominium segment.

Among selected 2-storey terraced housing schemes, average prices rose 2.61% year on year (y-o-y), from RM717,857 in 4Q2024 to RM736,429 in 4Q2025.

Taman Jindo posted the strongest increase at 3.4%, followed by Luyang Perdana at 3.07% and Ujana Kingfisher at 2.99%

One-storey terraced houses, on the other hand, recorded even stronger performance, with average prices rising 4.54% y-o-y. Taman Tuan Huat led the segment with a 4.72% increase, followed by Taman Sri Kepayan and Taman Nelly Phase 9.

The stronger performance of landed housing suggests that owner-occupiers continue to place a premium on homes offering land ownership, a larger living space and established neighbourhood appeal, according to Max.

By comparison, price growth in the condominium market remained more moderate.

Average capital values across selected condominium developments increased 1.56% y-o-y in 4Q2025. Likas Square recorded the strongest gain at 3.4%, followed by Jesselton Condo and The Peak Condominium.

Several developments posted only marginal increases, while prices at 1 Borneo Condominium remained unchanged.

Max suggests that the more measured performance of the condominium segment reflects increased competition from newly launched high-rise developments, which have broadened buyer choice and limited resale price growth.

In terms of rental yields, Kota Kinabalu’s residential market continued to compress in 4Q2025, although there are signs that the decline is beginning to stabilise.

According to data, the gross yields for landed housing generally ranged between 3.5% and 4%, while condominiums continued to offer slightly stronger returns. Among 1-storey terraced houses, yields ranged from 3.66% to 3.9%, while selected 2-storey terraced schemes recorded yields of between 3.52% and 3.96%.

Condominiums remained comparatively more attractive for rental-focused investors. Yields reached 5.22% at 1 Borneo Condominium, 4.34% at Radiant Tower and 4.25% at Likas Square.

Max says the moderation in yields reflects a market where capital values have risen faster than rents over the longer term. This indicates that Kota Kinabalu’s housing market continues to be driven more by owner-occupier demand and long-term capital appreciation than by purely investment-led activity.

“Going into 2026, we expect this split-market dynamic to persist. Affordable landed homes and practical owner-occupier products should continue to underpin the market, while higher-end developments are likely to perform more selectively depending on location, concept and pricing,” he notes.

In 4Q2025, new project launches in Kota Kinabalu highlighted a market increasingly divided between premium lifestyle products and affordable owner-occupier housing.

Among the more notable launches was Fortress City Sdn Bhd’s Arus Nova, a serviced apartment project in Jalan Tanjung Aru. The 184-unit development is aimed at affluent buyers and investors seeking a city-centre lifestyle product in a prime coastal location. Units range from 356 to 790 sq ft, with prices from RM475,000 to RM1.063 million, translating into around RM1,143 to RM1,480 psf.

With facilities such as an indoor pool, sunset bar, workout room and concierge-style services, Arus Nova reflects continued developers’ confidence in premium compact-format projects catering to higher-income buyers, short-stay users and lifestyle-oriented investors.

At the other end of the spectrum is Serai Perdana by Everest Era Sdn Bhd, located off Jalan Penampang-Kinarut/Papar Old Highway. The project comprises 165 apartment units sized between 807 and 1,264 sq ft, and priced from RM294,000 to RM458,000, or about RM362 to RM440 psf.

Unlike Arus Nova, Serai Perdana is positioned squarely within the affordable owner-occupier market, targeting first-time homebuyers, young families and upgrader households.

Max says the contrast between the two launches illustrates the breadth of demand in Kota Kinabalu’s residential market. While premium developments in established city locations continue to attract a niche segment of affluent buyers, the larger and more active portion of the market remains concentrated in accessible housing within mainstream affordability levels.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.