Luxury developers shift gears to mid-income earners in Sabah
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
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 sales figures mark a 27 percent decrease in volume and a 40 percent decrease in value from the first quarter of 2015.
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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 real estate 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 evidently still demand for property investments in Sabah. “The wealth is still here,” he said.
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Source: Property Report