Real estate agents are forecasting for Sabah to experience a V-shaped recovery in the market, which is expected to pivot in 2021 with recovery to follow in 2022 and beyond.
Juwai IQI’s Sabah Property Survey and Index – Quarter Four (Q4) 2020 report also said that Sabah residential prices and rents are expected to trail national trends and that first-time buyers would drive the activity.
Juwai IQI group executive director Kashif Ansari said the company has found that compared to the national trends, Sabah has more local first-time buyers and more local upgrade buyers, but fewer local investors and foreign buyers.
An estimated 39 per cent of Sabah’s new-home transactions in the first half of 2020 involved first-time local buyers in Sabah, compared to 34 per cent nationwide for such transactions by local buyers in the respective states.
Local upgrade buyers accounted for 27 per cent of Sabah’s new home transactions, compared to 25 per cent nationwide.
“This is a positive sign as it shows that first-time buyers are entering the property market in Sabah at a faster rate than investors and foreign buyers.
“Sixty-three (63) per cent of real estate agents expect first-time local buyers to complete a higher number of transactions in Sabah in the year to come,” he told Bernama.
The report stated that while first-time buyers made up 28 per cent of Sabah’s new home purchases in Q1 2020, they made for 39 per cent in the third quarter – nearly two out of every five transactions.
First-time buyers are the only buyer group expected to make more purchases in the year to come than over the past year. Sixty-three (63) per cent of Sabah real estate agents expect first-time local buyers to complete a higher number of transactions in the year to come.
That is higher than the national expectation, with 58.7 per cent of agents forecasting similar growth nationally.
The agent consensus is that Sabah prices would dip 7.4 per cent over the next year, before bouncing back 9.4 per cent in 2022.
Agents expect national prices to fall by 4.8 per cent in the year to come, before recovering in 2022 to grow by 10.6 per cent.
Meanwhile, Sabah rents are to fall more than twice as much as rents nationwide and, on recovery, to gain back less of their lost ground. While nationwide rents are expected to fall 4.8 per cent over the next year, in Sabah they are expected to drop 7.4 per cent.
In 2022, nationwide rents are expected to climb 10.6 per cent, while in Sabah they are forecast to climb 9.4 per cent.
Kashif said in spite of the challenges facing the property market, COVID-19 and the Movement Control Order (MCO) have shifted people’s mindset about how and where they want to live.
“The fact that first-time local buyers have increased their share in transactions demonstrates the desire for homeownership and security.
“It indicates the government’s stimulus measures to support this group have been effective. The government has made it easier for first-time buyers to acquire their first home with the reintroduction of the Home Ownership Campaign (HOC),” said Kashif.
He further said because of the coronavirus and economic difficulties, first-time buyers have an unprecedented opportunity to acquire property at possibly discounted prices and to obtain developer perks that provide added value.
The index report tracks industry expectations for prices, rentals, and market activity.
This is the first industry report based on the market knowledge of 344 real estate agents who participated in the survey.
Juwai IQI operates the Asian real estate super-brands dedicated to empowering residents of Asia to become residents of the world: IQI and Juwai Ltd.
IQI is a real estate network in Southeast Asia and the Middle East, which has more than 15,000 salespeople and associates across 15 countries and sold US$1 billion of property in 2019.
