Property News · August 30, 2016

Luxury developers shift gears to mid-income earners in Sabah


Wealth is still out there in the Malaysian state, but developers are shifting focus to more affordable offerings
Kota Kinabalu, the capital city of Sabah state in Malaysia. Nokuro / Shutterstock
Get the middle-income earners for now.
This seems to be the consensus among property developers in Sabah as the Malaysian state contends with a waning luxury housing market.
Sabah Housing and Real Estate Developers Association deputy president Chew Shang Hai told The Malay Mail Online that developers have geared their home offerings toward the middle-income segment. “This will counter sluggish property sales and start the wheels turning again by the second quarter of the year,” he said.
According to the association, the gross development value for properties launched in Sabah stood at around MYR2 billion (USD494 million) this year so far, compared with MYR3.75 billion (USD927 million) in 2014 and MYR2.7 billion (USD667 million) in 2015.
A total of 1,595 transactions worth MYR820.9 million (USD203 million) were registered in Sabah in the first quarter of the year, according to the National Property Information Centre. The figures mark a 27 percent decrease in volume and a 40 percent decrease in value from the first quarter of 2015.
More: Is Kota Kinabalu Malaysia’s best investment bet?
However, Knight Frank Malaysia noted a 60 percent take-up rate among developers in the first quarter of the year. “Developers have responded to the market environment with smaller units and more affordable projects leading the way,” Knight Frank Malaysia research developer Welton Chin said.
Several developers pin their hopes on stimuli from the government, in the form of less stringent qualifications for housing loans, for example. Unsold homes can be put down to rejection rates as high as 75 percent for loans from Sabah banks, according to Chew.
“If there is some stimulus, there will be a boost of activity in the market, and other sectors will follow suit,” he said.
Borneo Estate Development’s Ben Kong believes there is still demand for property investments in Sabah. “The wealth is still here,” he said.
Read next: Malaysia’s ultimate second-home spots

Source : property-report.com
Read more…Luxury developers shift gears to mid-income earners in Sabah

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