The edge | Rahim & Co Kota kinabalu Housing Property Monitor (2Q2021): Good Deals & Low Interest Rates Help KK Property Sales
Sabah‘s residential real estate market has shown some upward strength although it is still weaker than before the pandemic. âDespite the significant drop in residential property sales in 2020, real estate activity started to improve in 1H2021, although far from what it was before the pandemic,â explains the regional manager of Rahim & Co (Sabah ) Max Sylver Sintia, presenting the Kota Kinabalu Housing Property Monitor 2T2021.
âThe residential sub-sector transaction volume in Sabah in 2Q2021 was 1,198, up 9.91% from the number of residential transactions in 2Q2020. The value of transactions increased by 32.08% to reach 501.73 million ringgit in 2Q2021 compared to 2Q2020. Compared to 2Q2019, however, the volume and value of transactions decreased by 24.7% and 2.94% respectively. “
The bulk of the deals took place in Kota Kinabalu, Penampang and Putatan, with a total of 673 units or 56.18%, valued at RM352.28 million. About 49.33% (591 units) were priced at RM 300,000 and below, followed by 31.05% (372 units) in the RM 300,001 to 500,000 level; 15.03% (180 units) in the range of RM500,001 to RM1 million; and 4.59% (55 units) in the RM 1 million bracket above.
According to Max, good deals and low interest rates are among the main reasons for residential property sales in Kota Kinabalu.
âThe residential market will remain strong as long as the price is reasonable. The population of Kota Kinabalu continues to increase, especially with the influx of young people from other neighborhoods who find or seek employment in the city.
He points out that properties located in traditional hotspots remain popular even in times of economic downturn. âThe prices of our samples for landed residential properties remain resilient with minimal year-over-year growth in the quarter under review despite a lower percentage growth than in the years leading up to the pandemic. “
The issue of land scarcity limiting new developments has also played a role in price stability. âThe demand for residential land properties in Kota Kinabalu district, such as in Luyang, Damai, Penampang, Kepayan, Kolombong and Putatan regions, will remain intact as there is little land suitable for development, especially land holdings. Prices for existing homes will hold firm due to the right location and buyers will never go wrong when buying in these areas.
At the same time, notable transactions in the quarter under review include two acquisitions and one project open for sale.
In April, a 10.49 acre parcel along Jalan Bantayan-Minintod was acquired by Visaland Sdn Bhd for RM12.1 million. In the same month, a 0.5 acre plot facing Jalan Penampang and close to Queen Elizabeth Hospital was sold to Incoprime Sdn Bhd for RM 4.1 million.
âDuring the quarter under review, Taman Jelita’s new residential development in Tambalang, Tuaran – developed by Shelltown Development Sdn Bhd – started selling,â said Max.
Taman Jelita has 68 one-story terraced houses. The land area for mid-size units ranges from 1,460 to 2,214 square feet and for corner units, from 2,304 to 3,574 square feet. The sale price is between 304,000 RM and 476,000 RM. The development, located 5.6 km northwest of downtown Tuaran, has a 60% turnout after three months, according to Max.
He observed a cautious mindset among real estate players during this difficult time.
âWhile buyers, financiers and developers are all cautious, we expect the real estate market to remain sluggish. Market confidence should gradually return, but it will take time for our market to re-engage on the recovery path seen in 2019. â
Two-storey terraced houses
2-story real estate properties in Monitor registered an average growth of 1.47% year-on-year for the quarter under review. This is a decrease of 1.81 percentage point (ppt) from 3.28% a year ago. While it may sound negative, Max points out that 1Q2021, which recorded an average growth of 1.78%, was in fact down 2.28 ppt from the previous year.
“Therefore, even though 2Q2021 saw lower year-over-year price growth, the percentage point decline was slightly better compared to 1Q2021.”
Monitor properties all showed growth except for Luyang Perdana, which remained unchanged. âThe strongest year-over-year price growth was recorded at Ujana Kingfisher, with an increase of 2.56% to RM 600,000,â Max said.
This is followed by Golden Hill Garden (2.41% at RM 850,000), Taman Indah Permai (2.2% at RM 465,000), Taman Jindo (1.52% at RM 670,000), Millenium Height (0.81% at RM 620,000) and Taman Sri Borneo (0.76% at RM 660,000).
âTart in the quarter, there was marginal growth for homes in Ujana Kingfisher, up 0.84%, followed by Millenium Height (0.81%), Taman Jindo (0.75%) and Golden Hill Garden (0.59%), while other developments showed no price. growth, âsays Max.
For this type of property, rental rates were unchanged both for the quarter and in 2Q2020.
Meanwhile, the average gross yield fell 0.05 ppt yoy to 3.66%. The highest yield was recorded at Millenium Height and Taman Indah Permai (both 3.87%), Taman Jindo (3.76%), Golden Hill Garden (3.67%), Ujana Kingfisher (3.5% ), Luyang Perdana (3.47%) and Taman Sri Borneo (3.45%).
One-story terraced houses
For monitor one-story townhouses, average price growth for the quarter under review fell 3.57 ppt to 2.9% from 6.47% a year ago. YoY performance for 1Q2021 fell 4.45 ppt from 2.93%. Thus, the 2T recorded a slight improvement in performance compared to the 1T.
All three individual areas under the monitor showed positive price growth. âThe strongest year-on-year price growth was recorded in Taman Tuan Huat, with an increase of 4.55% to 460,000 RM, followed by Taman Nelly Ph 9 with 3.13% to 495,000 RM and Taman Sri Kepayan with 1.03% at RM 490,000.
âThe Qoq results show that Taman Tuan Huat registers growth of 1.1%, followed by Taman Sri Kepayan with 1.03% and Taman Nelly Ph 9 with 1.02%,â said Max.
Rental rates were unchanged for the quarter and year.
As for yields, he notes: âThe average gross yield achieved for one-story townhouses was 4.03%, down 0.11 ppt from 4.14% in 2Q2020. The highest yield was recorded in Taman Sri Kepayan with 4.29%, followed by Taman Tuan Huat (3.91%) and Taman Nelly Ph 9 (3.88%).
High rise buildings
The downward trend continued with condominiums in the Monitor, although prices for some condos remained stable. âPrices for the Bayshore condominiums and the Radiant Tower have remained unchanged, while others have fallen,â says Max.
On average, condo prices are down 4.12% to RM 523 per square foot, down from RM 544 per square foot a year ago. In 2Q2020, the year-over-year price growth was 1.34%. Thus, there was a price decrease of 5.46 ppt year-on-year during the quarter under review. Compared to year-on-year price growth in 1Q2021, the percentage point decline in 2Q2021 was slightly better, by 0.24ppt, he said.
For individual condominiums, the biggest drop in 2Q2021 was at 1 Borneo Condominium, which fell 9.8% to RM370 psf. Next come Likas Square (-7.1% at RM390 psf), Jesselton Condo (-4.9% at RM580 psf), Marina Court (-4.8% at RM600 psf), Alam Damai (-3.4% at RM570 psf) and The Peak Condominium (-3% to RM650 psf).
According to Max, in terms of qoq performance, 1 Borneo Condominium recorded a price drop of 2.9% while the others remained unchanged.
Meanwhile, condo rental rates have declined 12.55% year-over-year on average. Only the rents for Bayshore condominiums and radiant towers remained unchanged.
The biggest drop in rental rates was seen at The Peak Condominium, where rents fell 25.71% to RM2 psf / month. Next come Alam Damai (-25% at RM 1.64 psf / month), Marina Court (-16.13% at RM 2 2 psf / month), Likas Square (-13.04% at RM 1.48 psf / month), 1 Borneo Condominium (-11.11% to 1.62 RM psf / month) and Jesselton Condo (-9.38% to 1.93 RM psf / month).
Condos posted an average gross return of 4.11%, down 0.41 ppt from 4.52% a year ago, but slightly better than the 4.09% in 1Q2021.
The highest return was recorded at 1 Borneo Condominium with 5.24%, followed by Likas Square (4.56%), Radiant Tower (4.33%), Jesselton Condo (4%), Marina Court (4%) ), The Peak Condominium (3.69%), Bayshore Condominium (3.61%) and Alam Damai (3.44%).