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Kota Kinabalu: Sabah’s residential property market appears to be in a selective stabilisation phase, despite a rise in the building cost index, according to Knight Frank Malaysia property valuer and associate director for the Sabah office, Sr. Welton Edward Chin.

He noted that while long-term fundamentals remain supported by economic growth, household formation, and resilient prices, affordability constraints, supply absorption, and financing selectivity continue to shape homebuyer behaviour.

Sr. Chin made these observations at the Shareda-organised PropEx 2026, themed “Keys to Your Future – Own, Build & Thrive,” held at the Sabah International Convention Centre on Saturday (July 11, 2026).

He highlighted Sabah’s 2025 GDP growth of 5.10 per cent for its 3.76 million population—comprising 806,300 households—as supportive of market growth.

The home property market has seen population growth of 1 per cent per annum over the last 15 years, while household growth has averaged 2 per cent per annum over the same period—both supportive of the housing market. The Compound Annual Growth Rate (CAGR) for housing property from 2009 to 2024 stood at 5 per cent per annum.

“Housing needs remain strong given a relatively young demographic profile, with a sizeable youth and working-age population base,” Sr. Chin said, noting that buyers are driven by location-dependent demand and differentiated products.

Presenting his findings on “Navigating Sabah’s Residential Property Market: Cycles, Challenges and Opportunities,” he reported that average monthly transactions for landed properties reached 3,161, and 1,665 for high-rise properties over the past year, excluding vacant plots.

In Sabah, the value of transactions has grown at 4.5 per cent over the last 15 years, although transaction volume growth has been modest at 0.1 per cent per annum.

“House prices and income growth have moderated at a similar pace. Buyers remain price-sensitive and selective. Affordability drives demand. Residential values appear resilient with no broad correction, but upside is likely to be gradual,” he said.

He cautioned that rising or persistent overhang indicates a mismatch between product pricing, location, and buyer affordability.

“The current market presents a buying window, particularly for well-located, competitively priced, and completed or near-completed residential properties, rather than a broad-based buying opportunity across all segments,” Sr. Chin surmised.

Currently, the Overnight Policy Rate (OPR), which reflects commercial bank borrowing interest rates, stands at around 2.72 per cent, with the loan approval rate hovering around the median of 40 per cent over the past 15 years.

Rental trends, meanwhile, are location-dependent, with yield strength varying by area. Newer localities have observed improvements in rental income.

In a separate session, C.J. Teoh, co-founder of the company “belive,” discussed the prospects of the room rental business in Kota Kinabalu, referred to as “co-living,” starting with Kayana Heights near Universiti Malaysia Sabah (UMS) in the Alam Mesra locality.