Sabah especially city of Kota Kinabalu expected to have another great year for the year of 2011. A lot of people expected KK property mart to downturn but it has been constantly proven that they are wrong. I remember back in 2007, a lot of my clients believe that “crisis” will happen every 10 years. But it does not happen in 2007!!! That time our terrace house prices are in the range of RM250K (average of 2000sf), despite “financial crisis” in 2008/2009 our terrace house still on uptrend mode and surprisingly has exceeded RM350K an increase of 40% especially for existing or sub-sale market. Not only that, the whole picture getting uglier if you compare with newly launched properties whereby the prices are easily exceeding 50% with smaller land size. In general, newly launched houses in town are prices between RM380K-RM450K with land area of less than 1700sf (20sf x 75sf). This has eventually benefited sub-sale market!!!
Overview of 2011 for KK properties
In general I still strongly believe our residential will continue to do well. Rental market especially for selected area will continue to hold strong and appreciation will remain steady.
For non-landed (ie condominium & apartment) at matured area namely:
Likas-Indah Court, Lucky Height, Dah Yeh Court, Likas Court, Radiant Court, The Peak
Luyang- Hilltop Apartment, Fairway Mansion, Luyang Perdana Town house
Beverly Hill- Beverly Hills Apartment, Tmn Penampang
Penampang- Eden Height, Rainfield Court, Ganang Villa
Landed properties in general will continue to command good price due to high demand due to location, bigger land size, bigger built up and some with 999 titles. Rental yield for landed also remain steady for 2011 whereby I believe it will command better rental in the range of RM1k-RM2K depending on furnishing and location while selling price commanded will remain above RM350K-RM450K or even above RM0.5M! Preferred location will be more on matured area ie Luyang, Damai, Kingfisher, Kingfisher Sulaman, Penampang, Bundusan, Likas, Kolombong & Putatan area.
Is there an oversupply for our commercial property? Frankly speaking, I can’t answer this question. If there is really over supply, new project launched will not be so hot. The best example would be, KK Taipan whose started selling back in late 2007 for less than RM800K per block (1200sf x 3 storey, intermediate unit). Today it was transacted not less than RM1.3M with potential rental of RM6K per block. Not only that, 88 Market Place along Kepayan area sell for RM700K for 2 storey shop lot was transacted for more than RM1.22M last month with potential rental of RM5.5K-RM6.5 per month!!! So whether you think the market is saturating or not that is YOUR PROBLEM!!! The rich will continue to flood the market and continue to invest even though the rental yield is lower. But the fact remain, as long as the rental yield above our current FD rate, the rich will continue to invest in property market knowing it’s the only proven way to fight against inflation.
Focus in 2011 will be…
Residential – For those who want to accumulate property for rental collection you can focus more on residential mainly on area like Beverly Hills Apartment, Api-Api Apartment, Grace Court, Indah Court, Likas Court, Lucky Height, Hilltop Apartment or in general Non-landed properties below RM300K. While those who has a bit of capital you might consider landed properties at matured area like Likas, Damai, Kingfisher, Penampang, Luyang & etc as the rental yield is on uptrend more while sub sales is getting lesser due to increasing of owner occupancy.
Commercial – The best if you can accumulate at un-matured area especially these below RM1M for 3 storey shop lot / 2 storeys. Other than that, warehouse are under-supply in the market causing rental remain high at RM1 psf especially matured area like Kolombong. Last week there is owner wanted to sell his land at Kolombong area for RM95psf even though the land tenure is less than 17 years!!! With extention premium of RM15 psf (estimated), land price within Kolombong will remain steady above RM100 on average. Will there a buyer for this kind of land? Wait and see then…
Concluding my view for 2011, I’m very conscious on the “entry cost” of any of residential and commercial investment. I preferred to shy away from non-landed properties which prices above RM400 psf which I believe KK are not ready for it. While for commercial properties, growth area would be more focus on NORTH area especially along Kingfisher, Sulaman highway, Tuaran by-pass highway, & Menggatal. Big company like Pang Sheng, Permaju Bhd, Wah Mie, Wong kwok & Hap Seng is on the way to facelift the whole place and transform it into another half of KK’s. With the flush in of oil palm money and spillover effect, I personally hold strong confident on our property mart especially the next 5 years. The rules in 2011 remain that is “Buy & Wait” not “Wait To Buy” Happy Investing.
You cannot Grow Land..CK Wong & MY RiCH DAD