WHY INVEST IN REAL ESTATE IN KOTA KINABALU?

by CKWong

The below article contributed by self made deca-millionaires who has various experience in different industry before made it to the top. Today he foresee the future of KK’s which I believe it will turn out to be the “true picture” of KK’s few years from now.  Currently he is investing heavily in KK properties especially land for development. Soon he will reveal his first and latest MULTI BILLIONS project comprising mix development at primes location. Let us learn from the Rich and the Best!!    

Here we goes..

The world is presently poised at one of the most crucial points of modern economic development. Asia, led by China and India, is positioned to take over as the growth engines of the world economy- never in the history of the world has this ever been possible. All the countries in between China and India, will experience a spill-over growth effect. Malaysia and Singapore are particularly well positioned to take advantage of the expected boom because of our cultural heritage and ability to communicate and act as liaison between the 2 great cultures which have inherent language, cultural and political differences with each other.

China has, for the last decade and a half, acted as the production house of the world. But it is now facing inflationary pressures, part of the price of its own phenomenal economic success. A great deal of the steel and building materials ranging from tiles to sanitary fittings, machinery and equipment etc used by the whole world, now come from China.

What this translates to is Cost Push inflation and will result in higher building costs all round and therefore higher property prices.

Property prices in Malaysia are currently about the lowest in Asia- prices in Kuala Lumpur are MUCH lower than Manila, Hanoi, Ho Chin Minh, Bangkok and Jakarta(don’t bother comparing to Hong Kong, Singapore, Tokyo, Seoul, Taipei, Beijing, Shanghai, Shenzhen etc!) Yet our level of economic development is higher than some of the cities I have compared Kuala Lumpur with.

Now lets look at prices in Kuala Lumpur compared to Kota Kinabalu:

  • Apartments in prime locations like KLCC(RM2,500 psf), Ampang (RM1,400 psf upwards), Damansara (RM1,400 psf), Kenny Hills (RM1,600 psf), Mont Kiara/Sri Hartamas(RM1,100 psf upwards). In Kota Kinabalu, prime sites facing the sea within city center, now average RM700 psf.
  • Office space within KL city center now exceeds RM1,500 psf- Kota Kinabalu averages RM500 psf
  • Commercial lots in popular malls like Sungai Wang, are almost unavailable but the rare transactions show sales prices exceeding RM5,000 psf and higher.
  • Shop lots of 3-5 storeys in Kuala Lumpur in NEW AREAS like Kota Damansara exceed RM4 million per lot. In Kota Kinabalu, they barely command RM1 million.

Kota Kinabalu has virtually the cheapest city center land for a city that exceeds 500,000 people. It has traditionally been hampered by its extreme distance and relative isolation. But thanks to Air Asia and other regional airlines, that has now changed and will change the economics of Kota Kinabalu, even more in the next 5-10 years. There are already over 20 flights daily to Kuala Lumpur and each year is going to see much greater connectivity with other capital cities- Kota Kinabalu is coming into its own as a regional hub. It is no longer just a transit point as it was in the old days- it is fast becoming one of the most desirable tourist destinations in Asia! It will soon enough be as well known as Bali, Phuket and Penang as exotic beach resort destinations. Tourism is in its infancy in Sabah- on a scale of 1-10, it has just reached 1! The potential of tourism as a money spinner for a country has been recognized as being phenomenal- the exchange earnings of countries like Singapore, Hong Kong, Thailand, Indonesia are heavily predicated on tourist arrivals. Places like Bali, Hawaii, Phuket, Palau, Bhutan are almost totally dependent on tourism for their economic well being. There is virtually no industry or agriculture in these places, unlike Kota Kinabalu which has strong agriculture and industrial potential. Sustained economic and financial growth NEEDS a balance economy- if one compares the break neck speed of property development in China with the same crazy level of building in places like Abu Dhabi and Dubai, a logical person would have concluded that the Middle East, apart from oil, had little else going for it-it had no industry, no agriculture, no exports (apart from oil), limited infrastructure, a small domestic market. Therefore such rapid building had to be speculative in nature, unlike China which has strong industry, vast agriculture, huge processing and manufacturing, a well planned infrastructure development program and a huge domestic market that is enjoying sustained financial growth. What it means is that growth in the Middle East was not predicated on strong foundations, unlike China’s growth.

The 1st wave of tourism development has arrived in Kota Kinabalu- this could grow into a huge tsunami of tourists if properly managed. The tourists will come not just from Europe, Australia or the USA but the largest wave will be from China as the Chinese are generally compulsive travelers and keen to see the world- initially for the next 15-20 years, they will be able to afford only the nearby and cheaper destinations of Asia. Kota Kinabalu is well positioned to be a key destination for the billion mainland Chinese.

This will be supplemented by retirees who are seeking a better lifestyle for their golden years, a more affordable place to live out their lives. People are becoming more AWARE of what a good lifestyle encompasses; they are becoming more MOBILE, more independent of their families who actively encourage them to travel, to explore opportunities. Retirees are not poor people- they have accumulated substantial life savings but they are now aware that what they have accumulated is inadequate to see them through their remaining years. When national retirement plans and national health plans were calculated and initiated some 40-50 years ago, the actuaries who drew up these plans made some serious fundamental errors- they based their calculations on an average life span of just 70 years whereas with improved medical care and improved nourishment, people are commonly living past 90! They also underestimated the rapid escalation of medical care and medicine-bear in mind that private medical care was a rarity 40 years ago and the State took care of everybody’s medical needs. The rapid population growth coupled with increased lifespans, coupled with increased EXPECTATIONS in the level and quality of healthcare has put an extreme strain on every country’s healthcare delivery system and retirement care capability. What is a fact is that many countries and many major corporations are technically INSOLVENT if they are to meet their commitments to their citizens in respect of retirement and medical funding. So what choice do they have? They must seek cheaper alternatives- a downgrading in living conditions and medical care is not acceptable so they must export their people to countries that can provide such required care at a lower cost- this is a win-win situation and we should take advantage of it by welcoming these retirees who are far from infirmed but will come with a wealth of experience, international contacts and financial power. We must encourage them to network, to develop businesses in their retirement years- we could very well nourish a potential Nokia, Apple, Microsoft, Ikea, Ericsson!

Sabah under its present leadership, has flourished economically, generating healthy annual surpluses for the State when deficits were the common annual result previously. This has generated greater confidence and optimism amongst Sabahans and such optimism is infectious and good for the State. When people are more confident, they will spend more, reinvest more into longer term assets like properties, demand a better quality lifestyle for themselves and their families-in short, such confidence will create a more buoyant economy and the level of economic growth will be self sustaining and self fulfilling once it has gathered sufficient momentum. State revenues from oil, palm oil, timber will continue to grow and once wisely re-invested into infrastructure development, will create a multiplier effect that will spread down the economic heirachy, further boosting general confidence. The Federal Government now recognizes the critical importance of Sabah in the political context and will have to pour in far greater resources back into the State, further improving the economic outlook.

There will be a continuous increase in demand for housing as more and more students who come to Sabah to study, will stay back to participate in the rapidly growing employment opportunities that will be there in the coming years. This will be one of the results of the country’s efforts to make Sabah a key educational hub of Malaysia.

However, the same level of development will not be experienced outside of the key city of Kota Kinabalu- it will take many years for the effect of development to filter beyond the city of Kota Kinabalu as general experience has shown.

For all these reasons, it is apparent why real estate investment in Kota Kinabalu will be one of the safest decisions that one can make- soon enough, many West Malaysians will wake up to this and will come in hordes to buy their place in the sun!

Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

button WHY INVEST IN REAL ESTATE IN KOTA KINABALU?

Related posts:

  1. Why Invest in Real Estate KK Part 2
  2. Real estate seen taking a breather
  3. Win-Win Property in Kota Kinabalu
  4. Shopping Mall in Kota Kinabalu
  5. Greater Kota Kinabalu

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June 5, 2010 at 10:00 am

{ 35 comments… read them below or add one }

Azlan June 4, 2010 at 5:26 pm

Hi CK,

‘Property prices in Malaysia are currently about the lowest in Asia- prices in Kuala Lumpur are MUCH lower than Manila, Hanoi, Ho Chin Minh, Bangkok and Jakarta(don’t bother comparing to Hong Kong, Singapore, Tokyo, Seoul, Taipei, Beijing, Shanghai, Shenzhen etc!) Yet our level of economic development is higher than some of the cities I have compared Kuala Lumpur with.’

The reason why Bangkok, Manila, Jakarta properties are much more expensive than KL even if our economy and standard of living is ahead of them, is because of population density. Each of the above cities has a population of 12 to 13 million ppeople as compare to only 1.6 million in KL

And if I am a retiree from abroad whereby i would like to live out my life. I would choose KK. Simply because of it’s affordtability as compare to KL, Singapore , Manila, bangkok or Jakarta. And plus KK is a major Hub for Air Asia because of it’s geographycal location in relation to other major cities in Asia.

Plus ,Tourism Minister Datuk Seri Dr Ng Yen Yen have just announced on the 29 0f May 2010 that Participants of Malaysia My Second Home Programme (MM2H) who are 55 and above are allowed to work up to 20 hours a week.

During the last 2 years of global economy/ financial crisis we did not see our property price went down because of inflation ( fuel price was up). It went up !

Beware ! The Government is talking about removing subsidies !! Subsidy for fuel, flour, sugar, Rice , cooking oil. Cost will go up again . The question now is not , ‘Will they do it?’ but rather ‘when they are going to do it ?’
I can’t imagine going to my boss to ask for a pay rise just because of the sugar price increased. He probably would said, ‘ someone can take over my job’ I even more can’t imagine if we don,t have property to hedge againts this type of inflation !

Cheers

Reply

CKWong June 4, 2010 at 8:36 pm

Hi,
This is the jokes from our government. Cost inflated going to push properties prices further. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

Gwen June 4, 2010 at 5:45 pm

Dear CK,

I bet u for sure (for the tittle KK’s Properties will hit all time high !!), even I ever predicted that KK will become the 2nd Melbourne in the world, just buy the properties & wait…
I have no doubt that my friend Masidi will push up the Tourism in Sabah & Raymond will push up the investor(as he is the Minister of Industry holding KKIP & POIC in Sabah)
The problem is now the BLR change to 6.05%, definitely will affect the small buyer like us, how?

The other point is KK is the second busiest airport in Malaysia, KK is the nearest airport in City in Malaysia, KK has a lot of investor which is not LOCAL as long as they have MyKad rite? Will all of this contribute positively & directly to KK’s properties???

We share the answer here.

Reply

CKWong June 4, 2010 at 8:34 pm

HI,
I have one friend who is categories under “the rich” always say..even BLR reach 10% also he will continue buying. I also mention before, next few year properties going to be the games for “the rich”. You have no choice in the future. So start accumulate now. My dear friend, illegals did help us in strengthen our economy. Never abundant their contribution. They are “hand to mouth” group of people the will maintain our Sabah spending power. We need each other to grow.

For our Tourism Minister I think he only did 20% of the jobs. If he can be more effective and efficient, we are totally out already. Anyway its a opportunity for us now. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

Azlan June 4, 2010 at 10:44 pm

I do agreed that we need to regconised the foreigner workers contributions in our growth such as plantation, contruction, factories and ect. But our lawmakers has made 1millions of them as citizen if you look at our population growth in the last 30 years. No way thru natural birth can give that kind of figure. Scary !!! They are wellcome ! But our Authority need to regulate them. Of course , if we make them citizen, It’s only for one reason. I let you guess.

Reply

steven June 5, 2010 at 3:30 am

HI CK,
For real estate investment,the fundamental rule is “Location,Location,Location” But,the problem is most of the investor facing is “fear” and “clarity”.
People “fear” because the investment will make them lose money. So,they need “clarity”,they need some “Guru” to give them direction to what,where,when and how to invest.
investkk.com have so many people contribute the idea and opinion and shows the “clarity” on the real estate investment in KK.
KK is one of the most vibrant city in Malaysia. The city is full of life force and is fast expanding. Grab the good location and invest,please do not wait,if you wait …..you will wait for ever.
You can not grow land…….and choose the good location.

Reply

pharmacy tech June 5, 2010 at 4:23 am

Great information! I’ve been looking for something like this for a while now. Thanks!

Reply

Irwan Dahnil June 5, 2010 at 3:58 pm

Dear CK & Friends,

Thanks for the enlightenment. For 7 years I have been married with Sabahan, this blog is truly an eye opener.

I have invested in property @ KL for 10 years now, and KK would be my next playing field!

Thanks guys for a great contributions and sharing.

Reply

CKWong June 5, 2010 at 9:23 pm

Hi,
Hope we can learn from each other here. Happy Investing.

You cannot Grow Land..CK wong & MY DAD

Reply

april June 6, 2010 at 5:59 am

Hi Mr CK Wong

There are a few things that I dont understand. May be u could help. Thanking in advance.

Eg. CL title 99 years in KK area. Housing area around 100 houses example. House is 25 years old, so that means left with 75 years, so what will normally happen after 75 years? Govt took back the property so the owner wont own the property anymore? Or lease back to the owner but impose charges. Or other scenario?

Same thing, Eg. apartment with strata title 99 years. What will normally happen after that 99 years?

Another example, suppose apartment is 50 yrs old and it reaches its life span become a ‘danger block’, so it will be vacant after that, not suitable to live anymore. So there is a remaining of 49 lease year. So who is responsible to rebuild the whole block? The Management? What about the building cost? Say by that time it will need 800K to rebuild each unit for 800 sq. ft. Is that mean the owner have to pay the 800K to the developer/management in order to buy back the unit? Or other scenario?

What if say there are 100 units in that block, but most of them dont agree to rebuild the unit, then what will happen then? Will the owner get any compensation?

Does insurance cover ‘life span’ of apartment/condo?

Sorry so many questions here to pose. have been asking a few friends but cant get a conclusion.

Thanks a lot for your help.

Reply

CKWong June 6, 2010 at 8:20 am

Hi,
Very good question. Normally for landed property CL 99 leasehold will last more than that. In normally situation, land office will allow you to renew the title ie Taman Antarabangsa at Likas. The lease has been extended to 99 years. But for apartment normally the leasehold started the moment developer submitted their subdivision of the titles. Like Api-api apartment it might have more than 80 years now. Never in my entire life ever encounter this problem in Malaysia (so far). And for insurance, bank will continue to insured it as long as the value of the property can be comfirm by the valuer.

Anyway my dear friend..I never thought of living up to 99 years. So you might need to filter this factor when you think of buying property for investment. You never fall in love with it..you mainly only use it as a tools to fight against your inflation. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

ADK June 6, 2010 at 2:09 pm

Definitely we want our property can be given to our next generation. Sabah 99 years not too bad, Sarawak has only 60 years land lease. The xxxx policy.

Reply

CKWong June 6, 2010 at 9:45 pm

HI,
Im from sarawak, I accumulate more held in pepertuity land. Even better than our 999 title from Sabah. But anyway as long as you buy properties..you have win half of the battle already. No worry. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

GK June 7, 2010 at 1:25 pm

Hi..CK & guys
Get a Sabahan wife/husband..then u can buy NT land = land held in pepertuity…

BTW, i wonder how all this land CL999 land come out in the market at the first place? who have authority over giving land to the first owner (beside by applying to the government ages ago..F.R L.A etc..) expecially beach land which is very demanded lately..

is the process transparent enough? as the land is initially owned by the “Rakyat”, which firstly gifted by the govenmnent to the people and eventually ended up in the capital market.

As lately i come across some F.R titles which are printed year tenure starting from 20+years back..(meaning given 20++ years ago) but only recently being finalized and issued to the owner(first owner). How could this happen? due to premium not paid? conversion issue?is this normal? how could land office verify those situation in term of legal ownership etc.? meaning land offce take around 20years++ to come out a totally new title? anythg can happen in 20years…how to keep record/file for that long? can be sabotaged and false by certain minority? very dangerous thinking…

anyone, any idea? pls enlighten..10Q

jck June 7, 2010 at 2:20 am

Normally extensions to the lease period is given.
However, expect hefty premiums to be paid to gomen for the extensions.

Reply

april June 6, 2010 at 10:11 am

Hi Mr CK Wong

Thank you very much indeed for your prompt reply, i think i get your point.

Just thinking to minimize the risk if possible and manage to pass on a good asset/property to the children one day considering once govt remove the subsidy, the future generation might have a a hard time to get a roof over their head.

Anyway, generous, kindhearted and wealthy person like you CK should deserve to live even until 150 yrs old. Scientific report mentioned that human is possible to live up to 150 yrs old (well, if it is allowed by God). Provided no war, no natural disaster and with the advancing medication and medical research in the future, it is a dream which the scientists might achieve one day.

Thanks very much for your sharing.

Reply

CKWong June 6, 2010 at 11:26 am

HI,
I dont need 150 years old of age. Thank you. Anyway to avoid these problem, try accumulate more 999 land title. I think its easy. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

april June 6, 2010 at 3:31 pm

Hi Mr CK Wong

Yes, you are definitely right with 999 land title. Em.. the thing is it is not that easy with low middle income group like me with such limited income and resources at hand.

Hopefully will be able to accumulate one soon. Just need to work harder and smarter. Before the D day comes, there still will be chances. ha ha..

Thanks for your advices.

Reply

CKWong June 7, 2010 at 11:35 am

HI,
You need faster speed and extra money for you to get such 999 deals. As I mention, waiting is a “costing” to all of you. Happy Investing.

You cannot Grow Land..CK Wong & MYDAD

Reply

kth June 8, 2010 at 8:29 am

hi ck, i saw two construction sites along the main road at damai area.one opposite the shoplot near the esso station and the other one near the roundabout toward SMC,just behind the cosway shop.any idea about the constructions going on there?thks

Reply

CKWong June 8, 2010 at 11:19 am

Hi,
The one opposite Esso is belong to wellknown developer which intend to built his own personal detached house. And the land at the back of Cosway, I’m not too sure yet. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

eric June 10, 2010 at 6:43 pm

Ck Wong,
i have a question…
my family has a piece of land located near to the town at tenom.
it was brought by my father at 1x years ago.
i would like to ask how can i know what is the value of the land?
should i need to appoint someone to value the land?
where can i find the person to value the land?

Reply

CKWong June 10, 2010 at 8:47 pm

Hi,
Please contact CH William for the values at 088248801. Happy Investing

You cannot Grow Land..CK Wong & MY DAD

Reply

school grants June 11, 2010 at 9:59 am

Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

Reply

steven June 21, 2010 at 5:54 am

Hi All,
KK is a coastal town,visitors can have the best of both worlds and find a hotel on the city waterfrount and be close to both the beaches and center of town.
Mount Kinabalu and kinabalu National park is a world heritage site,kk also serves as a gateway to the tropical island off Malaysia Borneo and fast becoming a popular resort destination in its own right.
kk has the sufficient environmental conditions to develop “Trendy Economy” which,cultural,arts and fashion will become the future star to be explored by business man.

Reply

steven June 24, 2010 at 5:19 am

Hi All,
KK City Waterfront will feature one of the longest city waterfront boards in Asia and is poised to become the city’s prime tourist attraction.
It is envisioned to offer a new and vibrant urban street-space atmosphere in the heart of KK.KK will become a “Style City” where shopping center and commercial development that combines the traditional retail functions of a shopping mall with leisure amenities catered towards upscale consumers and tourists.KK will become a vibrant place where community takes shape and public life happens.
Recently, we can see a lot new coffee house blossoming in “Gaya Street” and in shopping mall near sinsuran.

Reply

nadia July 3, 2010 at 3:57 pm

dear ck wong
i’m buying cyber city apt 2..
but i’m wondering…while i am interested in ground floor only why the price of 1st floor are more expensive than the former(GF)???

( i thought all this while that GF much more better than 1st floor)

tanx..

Reply

CKWong July 3, 2010 at 7:28 pm

Hi,
At all time 1st floor are the most valuable units for all walkup apartment ie. more privacy compare to the ground. Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

reuben March 24, 2012 at 4:27 pm

Hi CK,

Last year I bought three properties ,all at over RM 700psf namely KK suites and Loft.I am not sure it is a good investment considering the price are almost like some KL properties.

reuben

Reply

CKWong March 25, 2012 at 2:27 am

HI,
I’m totally avoiding such project. Imaging my RM750K commercial giving me rental yield of 6.6%, what about your KK suites? at RM700psf you need to rent RM3.85 psf or RM2600 per unit of KK suite if it is 700sf. Can you achieve such return? I’m doubt over such property. Happy Investing.

You cannot Grow Land..CK Wong & MY RiCH DAD

Reply

reuben March 27, 2012 at 3:52 pm

CK,

Thank you for your prompt reply.Where to find a 750k commercial in kk?
Another question.Will the IRB still “tax” for a property sale even though it is over 5 years old(No capital gain tax)?,even though it is my first property sale.

reuben

Reply

CKWong March 28, 2012 at 1:30 am

HI,
RPGT after five is is “zero” unless you are using company name to buy. To buy RM750K commercial is abit tough. But you still need to find. Otherwise how? Happy Investing.

You cannot Grow Land..CK Wong & MY RiCH DAD

Reply

Jenny May 22, 2013 at 8:03 am

Dear CK
Latest PSF for pacificity mall went up steeply due to demand. Is this overpriced? What is the average PSF for shop lots within a shopping mall?

Jenny

Reply

kings dominion discounts July 17, 2013 at 8:07 am

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Reply

CKWong June 7, 2010 at 9:40 pm

HI,
The effeciency of our land office is always not up to our standard. That why land with 999titles is getting more expensive and scarce. Grab some before prices rise further. My dear friend, we can’t expect the government to act faster for our own benefit. Act on your own. Majority of my land is held in 999 titles :) Happy Investing.

You cannot Grow Land..CK Wong & MY DAD

Reply

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