theSun Property February 2016

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ON FRIDAY FEBRUARY 26, 2016
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HAVING gone through the
property outlook in the
Klang Valley, Penang and
Johor over the last few
weeks, we cross over to the east to
explore what is expected of the
market in 2016 for Sabah and
Sarawak.
SABAH
According to the CHWilliams
Talhar &Wong (WTW) 2016
PropertyMarket report, “Sabah
property prices are envisaged to be
sustained, going into 2016. This is
provided that nomajor changes
occur tomacro-economic
conditions and government
policies.”
Sabah, Kota Kinabalu in
particular, experienced a soft
market across most property
sectors in 2015. Tight bank lending
policies, coupledwith the delay for
developers in obtaining
development plan approvals among
others, saw fewer newproperty
launches andmoderate transaction
activities, reported the real estate
services company. However, there
was no indication of any drop in
property prices.
The scenario for 2016 is
reported to be quite the same other
than the state cabinet giving the
green light for earthquake-
resistant building guidelines which
SUB MARKET ANALYSIS
Landed
residential
The landed residential sector in most cities reported
steady performance, whilst both Alor Star and Seremban
experienced strong buying interest in 2015. Being the
only town that had weak market sentiment, Lahad Datu
needed to restore civil security before it can regain
market confidence.
High-rise
residential
High-rise residential is an emerging development
trend in most towns and cities in West Malaysia. In East
Malaysia, high-rise residential are generally segregated
into apartments and condominiums. The strong buying
interest in condominiums in Ipoh, Batu Pahat, Miri and
Bintulu is expected to be flattish in 2016 while other
cities are expected to stay firm.
may raise construction costs and
property prices.
On thewhole, there aremany
good areas and land for
development whichwill continue
to be safe bets in the long term,
given the current lack of new roads
to open up new areas. Moreover,
with Kota Kinabalu expanding and
becomingmore densely populated,
moving away from the city centre
could become a good far-sighted
move.
SARAWAK
The real estate firm’s experts say:
“The next couple of years will
certainly be a true test of ‘survival
of the fittest’ as challenging times
are expected, therefore changes to
cope with these challenges are a
must.”
The overall property market
for Sarawak has generally not been
the most exciting ... lustreless or
like the “bigger” towns of Kuching,
Sibu, Miri or Bintulu, laid-back. In
2015, the anticipation of higher
mortgage rates and the increased
inflation pressures with the
implementation of the 6%GST
further dampened property sales
as buyers took on a “wait-and-see”
attitude. Then again, WTWstates
that this cautious approach may
have also resulted in some market
corrections.
“Despite residential property
being exempted fromGST, the rise
in construction costs pushed up
the prices of residential property
by 3% to 6%. Notwithstanding the
less conducive climate, the
property sector remained stable
especially those in prime locations.
Residentials belowRM400,000
are still in good demand but those
at the upper end of the scale are
affected by slower sales. In the
face of the slackening economy,
developers are offering attractive
sales packages while investors are
moving cautiously,” saidWTW.
Foreigners will be glad to know
that Sarawak has kept to its foreign
ownership minimum pricing of
RM350,000 per property unlike the
RM1 million requirement in the
peninsula. The Sarawak chief
minister also said that subsidiary
land titles shall follow the land
tenure of the original parent title,
which augurs well for the property
sector as the interests of owners
and purchasers are protected.
WTW feels if things carry on as
they are, one can expect a further
slowdown across all property
sectors in Sarawak. However, it is
perceived that attention will be
diverted to the secondary market
which is less affected by the
current economic measures such
as the GST.
TheWTWreport states: “The
residential market will continue to
dominate the market, comprising
Property overview 2016 PART3
> The outlook in Sabah and Sarawak
about 80% or more of the overall
property stock. There will still be
demand for affordable housing of
not more than RM250,000 per unit
with recommended built-up of
850sf. It is perceived that the
majority of residential units would
and should be focused on low cost,
low cost plus and affordable
housing, as the way forward.
Generally, the market outlook for
Sarawak this year is expected to be
bleak and uncertain. Developers
will be compelled to built
according to market wants and
what buyers can afford rather than
what developers prefer in terms of
profitability.
As the economy is expected to
be slow and recessive, developers
will be hard pressed to survive in
an increasingly competitive
market.”
[Information and charts courtesy ofWTW]
Jiajaya Properties Group’s Serene Sanctuary inMiri.
Mah Sing’s Sutera Avenue in Kota Kinabalu.
2015 – 2016
PROPERTY MARKET
DIRECTION
2015 – 2016
PROPERTY MARKET DIRECTION
EAST MALAYSIA LANDED
RESIDENTIAL
HIGH-RISE
RESIDENTIAL
2015 2016 2015 2016
Sabah
Kota Kinabalu ► ► ► ►
Sandakan ► ► ► ►
Tawau ► ► ► ►
Lahad Datu ▼ ▼ ▼ ▼
Keningau ► ► NA NA
Sarawak
Kuching ▲ ▲ ► ►
Sibu ► ► ▲ ►
Miri ► ▼ ▼ ▼
Bintulu ► ► ► ►