I read this in Daily Express (26th Feb). No, this is not Greater KL or Penang or Iskandar. This is Kota Kinabalu which is the third highest in Malaysia in terms of increase in property prices. According to Francis Goh who is Shareda’s President, for the past 5 years, prices in Sabah has surged between 100-150% in prices and this is expected to continue for the next five years. As an example, the price of a double-storey terraced house with a built up of 1,200 sf has increased 114% or RM600,000 between 2007 and 2011. Besides landed properties, the prices of walk-up apartments, medium end condominiums have also increased between 50-94% over the same period of time. RM 1,500 per sq ft.
Goh also said that the current new units of 10,000 properties of all types are still insufficient to cope with the demand. This is because Kota Kinabalu’s population of 800,000 is growing by 5% every year which meant 40,000 new population. That is the reason why the new properties growth of 10,000 per year is hardly sufficient.
Another reason why the prices of properties have also increased is because today, the price of land within three-kilometre radius from the city centre now costs between RM300 – RM400 psf or between RM12 million and RM16 million per acre! He also added that even at this price, it is tough to find because these prime locations are becoming rare. In 5 years time, it would be difficult to look for condominiums close to the city because there are simply no land remaining.
If the growth is indeed 5% every year moving forward, it means that the insufficient supply situation would continue and may get worse unless the supply is increased much more than current situation. Even if we take a ratio of 1:4, at minimum, 10,000 properties can only cater to the 5% growth, without taking into account the needs of the current population, of upgraders and even MM2H requirements though little as they may be.
Personally, I have a small condo in Kota Kinabalu. If what Mr Goh said is true, should I really consider buying one more? However, for those who are thinking of buying today, the prices are already very high. It may not be near KLCC or Penang’s Tanjung Seri Pinang but if KK is benchmarking the highest points in Malaysia, it may not be too long when Mr Goh’s prediction comes true.
written on 24 march 2014
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