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Property prices in KK surged up to 100-150pc: Shareda

Published on: Wednesday, February 26, 2014

Kota Kinabalu: The City is ranked the third in Malaysia in terms of the rapid surge in property prices, after Penang and Kuala Lumpur with property prices surging between 100 and 150 per cent in the past five years in the State.

The trend is expected to continue for the next five years, said Sabah Housing and Real Estate Developers Association (Shareda) President, Francis Goh.

He said the price of a double-storey terraced house with a built up area of 1,200 square foot has increased up to 114 per cent or RM600,000 between 2007 and 2011.

Last year, he said a double-storey terraced house cost around RM850,000 while a double-storey semi-detached house is priced at more than RM1 million.

Briefing Sabah's property market overview to some 50 entrepreneurs and investors from China at Wisma Kinsabina, he said prices of walked up apartments, medium end condominium and high-end condominium have increased between 50 to 94 per cent in the same period of time too.

Goh said as for the commercial sector, prices of two-storey and three-storey shop offices have surged 61 per cent and 111 per cent between 2007 and 2011, respectively.

"A two-storey and three-storey shop offices now cost around RM880,000 and RM 1.6 million respectively," he said.

He said for retail malls, a ground floor unit would be sold at around RM2,800 per sq ft, whereas a unit on the first and second floor at RM1,800 per sq ft and RM 1,500 per sq ft.

On another note, Goh said together with the oil palm followed by oil and gas as well as tourism, the property development sector had contributed greatly to the Sabah's economy.

Goh said that despite building more than 10,000 properties of all types every year but it was still not sufficient to cope with the demand.

"Kota Kinabalu has a population of around 800,000, and growing at five per cent rate every year," he said, adding that the 10,000 new properties annually, generally would not be sufficient to meet the population growth of 40,000 annually.

Among those at the half-day briefing were Yihe Imperial International Education Research Institute president Professor Ai Xin Jue Luo Qi Yi, who led the China delegates, Bank of China (Malaysia) Berhad chief executive officer Wang Hongwei, Bank of China (Malaysia) Berhad East Malaysia regional general manager Zhang Hong Kun and liaison secretary to the Minister of Special Tasks Albert Kok.

Meanwhile, Goh urged the Bank of China to set up a branch here in order to provide loans for developers to build better five-star hotels and high end leisure properties.

"As the president of Shareda, I hope that the Bank of China will set up a branch here as soon as possible and together with developers, we can develop Sabah into a tourism haven."

According to him, he had asked Ministry of Tourism, Culture and Environment Datuk Masidi Manjun for the reason Sabah only had five five-star resorts only and the answer was that Bank Negara Malaysia did not encourage commercial banks to approve loans for developers or investors wanting to build hotels as the investments as high-risk ventures.

Actually, Goh said the existing resorts in Sabah should be rated six to seven stars when compared to the five-star rated resorts in Kuala Lumpur.

"Resorts here are built on land no less than 300 to 700 acres," he said, adding that more developers would venture into leisure properties development in the future.

This included beach villas, lagoon villas, riverside villas, paddy villas, farm villas, hilltop villas, cliff villas, forest lodge, chalets, service suits, service apartment and hotel suites.

In this respect, Goh said the delegates might consider purchasing or building leisure properties in Sabah.

"In line with the vision of Sabah Government to turn stretches of long white sandy beaches along the west coast up to Tip of Borneo under Sabah Development Corridor for tourism development known as 'Kinabalu Gold Coast', Sabah shall excel and will soon take over Bali or Langkawi if the development trend for leisure properties can be propelled," he said.

Goh also suggested another investment option for the entrepreneurs from China was to acquire unique high-end properties such as the Peak Condominium with sea view along Likas Bay.

"I think that high end properties are more worth it and yield a higher return on investment."

However, Goh said they should not be too surprised with the price of the properties because the land within three-kilometre radius from the city centre now cost between RM300 and RM400 per sq ft or between RM12 million and RM16 million per acre.

"We cannot build more than 80 units on an acre of land," he said, adding that these prime locations were now considered rare.

In five years time, he said it would be difficult to look for luxury condominiums close to the city as they would no be able to find land anymore.