This article first appeared as 'Prices of residential properties on an upward trend' in City & Country, The Edge Malaysia Weekly, on June 17, 2019 - June 23, 2019.
Good news is much appreciated, especially during challenging times, so property owners in Kota Kinabalu may be happy to know that the value of their properties is slowly moving upwards.
“The volume and value of residential properties in Sabah increased in 1Q2019 from the previous quarter,” says Rahim & Co branch manager (Kota Kinabalu) Max Sylver Sintia in presenting the 1Q2019 Kota Kinabalu Housing Property Monitor.
“Despite the challenging conditions in a soft market, prices of residential properties were generally on an upward trend, particularly those in mature development schemes or close to the city centres and commercial centres,” he adds. Examples of mature development schemes are Taman Luyang, Grace Ville, Taman Fu Yen and Beverly Hills Apartments while properties near the city centre and commercial centres include residential units in Damai, Putatan, Jalan Bundusan and Jalan Lintas.
“The landed properties we sampled recorded a year-on-year price increment of 3.7% to 7.76% while the condominiums saw a y-o-y price increase of 1.2% to 6.2%, with no price growth recorded at Jesselton Condominium,” says Max.
The pace of growth, however, was not as fast as before, he points out, adding that discerning purchasers may still find bargains if they do their research.
“Several niche, old development schemes are worth looking at for those looking for a good bargain,” says Max. “These include older stratified and landed property developments on the northern and southern outskirts of Kota Kinabalu, such as the Menggatal, Tuaran, Petagas, Putatan and Lok Kawi areas.”
Meanwhile, the rental market in Kota Kinabalu saw lower gross yield, says Max. “The yield saw a downward trend but was generally stable at between 3.68% and 4.67% for the landed properties sampled, and at 3.75% to 5.62% for the condominiums surveyed.
“The recorded yield was still good compared with the returns from other investment choices,” he continues. “The lower yield was attributed to the increase in the capital values and transaction prices of the properties. Lower returns in the residential rental market in Kota Kinabalu was due to prices rising faster than rents. The rising cost of construction, scarcity of suitable development land within Kota Kinabalu and inflation had partly contributed to the fast increase in prices compared with rents.”
The rents for condominiums, especially in the older schemes, appeared to be under pressure due to the many choices available in key areas, including newly completed schemes, says Max.
Two-storey terraced houses
Max says 2-storey terraced houses saw an average price growth of 5.93% (about RM35,000) y-o-y, lower than the 7.58% seen the year before. However, on a quarter-on-quarter basis, 1Q2019 saw a higher average price growth of 1.71% (averaging at RM10,714) compared with 1.29% in 4Q2018.
Looking at the areas sampled, the highest y-o-y price growth was seen at Taman Jindo (7.76% to RM625,000). This was followed by Taman Sri Borneo (6.9%), Luyang Perdana (6.72%), Golden Hill Garden (6%), Taman Indah Permai (5.95%), Millenium Height (4.46%) and Ujana Kingfisher (3.7%).
The highest q-o-q growth was also recorded at Taman Jindo with 2.46%, followed by Luyang Perdana (2.14%), Golden Hill Garden (1.92%), Millenium Height (1.74%), Taman Sri Borneo (1.64%), Taman Indah Permai (1.14%) and Ujana Kingfisher (0.9%).
In terms of the rental market, 2-storey terraced houses saw an average growth of 4.14% y-o-y, lower than the 5.56% seen the previous year.
Ujana Kingfisher registered the highest rental growth rate of 6.06% y-o-y to RM1,750 per month. This was followed by Taman Sri Borneo (5.56%), Luyang Perdana (4.76%), Golden Hill Garden (4%), Taman Indah Permai (3.45%), Taman Jindo and Millenium Height (both 2.56%).
The average q-o-q rental growth for 2-storey terraced houses was 2.28%. The highest q-o-q growth was recorded at Taman Indah Permai with a growth of 3.45%, followed by Ujana Kingfisher (2.94%), Taman Sri Borneo (2.7%), Millenium Height (2.56%), Luyang Perdana (2.33%) and Golden Hill Garden (1.96%). No rental growth was recorded in Taman Jindo.
The average gross yield was 3.86%, with the highest yield recorded by Millenium Height at 4.1%. This was followed by Taman Indah Permai (4.04%), Golden Hill Garden (3.92%), Taman Jindo (3.84%), Ujana Kingfisher (3.75%), Luyang Perdana (3.69%) and Taman Sri Borneo (3.68%).
One-storey terraced houses
“Our sample of 1-storey terraced houses recorded an average price growth of 6.17% y-o-y (about RM25,000) in 1Q2019,” says Max. This was a slower growth compared with the year before at 8.08%, he highlights.
Houses in Taman Tuan Huat recorded the highest y-o-y growth of 6.67%, followed by Taman Nelly Ph 9 (5.95%) and Taman Sri Kepayan (5.88%).
Meanwhile, the q-o-q price growth averaged at 2.38%. Taman Tuan Huat recorded the highest increase of 2.56%, followed by Taman Nelly Ph 9 (2.3%) and Taman Sri Kepayan (2.27%).
Rental growth averaged at 3.21% y-o-y. Taman Tuan Huat registered the highest rental growth of 3.45% to RM1,500 per month. This was followed by Taman Nelly Ph 9 (3.23%) and Taman Sri Kepayan (2.94%).
Quarter on quarter, the average rental growth was 3.21%, with Taman Tuan Huat at 3.45%, Taman Nelly Ph 9 at 3.23% and Taman Sri Kepayan, 2.94%.
The average gross yield was 4.49%. The highest gross yield was seen at Taman Sri Kepayan at 4.67%, followed by Taman Tuan Huat (4.5%) and Taman Nelly Ph 9 (4.31%).
The average price of the condos sampled rose to RM534 psf in 1Q2019 from RM519 psf in 1Q2018, an increase of 2.87%, says Max.
The highest y-o-y price growth was seen at Bayshore Condominium (6.2% to RM515 psf), followed by Marina Court (5.1%), The Peak Condominium (3.1%), Alam Damai and Likas Square (both 2.6%), Radiant Tower (2.1%) and 1Borneo Condominium (1.2%). No y-o-y growth was recorded at Jesselton Condominium.
On a q-o-q basis, the average price growth was 0.48%. The best-performing area was Likas Square, which saw a 1.3% increase (to RM400 psf from RM395 psf), followed by Bayshore Condominium (1%), Alam Damai (0.9%) and The Peak Condominium (0.8%). No changes were recorded in Jesselton Condominium, Marina Court, 1Borneo Condominium and Likas Square.
In terms of rent, units at Marina Court fell by an average of 1.45% (to RM2.62 psf from RM2.65 psf previously). It was followed by Radiant Tower (-4.17%), 1Borneo Condominium (-5%) and Alam Damai (-5.88%).
“Two of our sampled condos recorded a y-o-y increase in rental rate. Likas Square grew 2.22% to RM1.70 psf per month from RM1.67 psf per month in 1Q2018 while Bayshore Condominium registered a 1.75% increase to RM1.61 psf per month in 1Q2019 from RM1.58 psf per month a year ago,” says Max.
He adds that there were no q-o-q rental rate changes recorded for the properties surveyed by the monitor.
The highest gross yield for condos was achieved by 1Borneo Condominium with 5.62%. It was followed by Likas Square (5.11%), Marina Court (5.06%), The Peak Condominium (4.93%), Jesselton Condominium (4.79%), Alam Damai (4.48%), Radiant Tower (4.42%) and Bayshore Condominium (3.75%).