Promising outlook ahead for Sarawak’s property market

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KUCHING: With the Sarawak government’s effort to pump up the economy through capital investment, the property market in the state has begun to witness transformation in the property landscape.

According to CH William Talhar Wong & Yeo Sdn Bhd’s (WTWY) market report, Sarawak has attracted the most proposed capital investment in the country for the first 11 months of 2011 valued at RM8.16 billion forming about 18 per cent of the country’s total investment, of which close to 50 per cent came from foreign direct investments (FDI).

Recent interviews with WTWY managing director Robert KS Ting and few other major property developers in Sarawak led to the conclusion that uncertainties would prevail in undermining the market.

However, fundamentals indicated that there was still much room for concerted growth moving forward.

The recently published report stated that Kuching’s property market was vibrant and opportunities abounded for property investors to ‘ride the current property wave’.

It pointed out that the industrial property sector was still regarded as the most inactive compared with the other sectors. Even with the Sarawak Corridor of Renewable Energy (SCORE) coming in, the industries were expected to be concentrated more in the central region of Sarawak, benefiting towns such as Bintulu, Mukah, Kapit and Miri.

It also said the high rise condominium sector which had slowed down since the mid 2000’s seemed to be turning around at the end of last year, with the launch of several highly anticipated projects which could very well mark the rejuvenation of high-rise condominium projects.

On the other hand, the increasing tourists for 2010 and 2011 as well as the positive outlook on the tourism sector had also sparked a growing interest from owner-operators for smaller, budget-style hotels to try to capture the tourism market.

The occupancy rates of hotels for Kuching was recorded at an average of only 43.3 per cent in 2010. However, this sector picked up in 2011 with the highest number of visitors recorded year-on-year for 2011. Three to five star-rated hotels also tended to fare better with occupancy rates between 60 per cent and 65 per cent.

In Miri, it was anticipated that the development of high density apartments and condominium projects would increased whilst large-scale housing projects decreased.

Meanwhile, the retail sector in the city would experience a boost with the completion and opening of several new malls – Permy Mall at Bandar Baru Permyjaya and MYY mall at Lutong as well as the seven storey Imperial City Mall at Jalan Asmara/Merpati.

“Prices and sale have been on the steady rise, especially for the housing market and will continue to improve with time, with the number of buyers increasing, aided by government stimulus,” the report noted.

It stated that the prices of houses in Miri should remain competitive in 2012 and climb further due to rising costs of construction materials, land and labour.

In Sibu, it saw a significant improvement in the retail and commercial sector with developments being launched in suburban areas. In mid 2011, the completion and opening of two large shopping complexes namely Star Mega Mall and Giant, had increased the potential of the surrounding developments.

On the residential front, it pointed out that the demand for residential properties was expected to be optimistic with continuous interest in the prime and secondary areas, especially with limited land available for development near the town centre.

Likewise in Kuching, the industrial sector in Sibu was still regarded as the most inactive property sector compared with other sectors, although piece meal private industrial projects were still on going. WTWY said the industrial centre was expected to get a boost from SCORE for downstream projects.

For Bintulu, the housing sector would continue to experience active housing construction activity, including increased low cost housing. It revealed that double-storey terrace houses and double-storey semi-detached houses remained the most favourable and saleable products in the market.

According to the report, the average price for these properties had increased from RM388,000 to RM400,000 for double-storey intermediate terraced houses, from RM403,000 to RM573,000 for double-storey corner terraced houses and from RM488,000 to RM730,000 for double-storey semi-detached houses.

On top of that, Bintulu was also set to experience a boost to its retail sector with the building of a few new shopping malls expected to be completed in 2012 and 2013, such as Times Square Mall at Jalan Tun Hussein Onn and Commercial Square at Jalan Ahmad Zaidi.

Most of the shophouses there were located outside the existing commercial core to the Parkcity development and suburban areas due to the limited land available for commercial development at the existing town centre area. Most of the recent launches in Bintulu were three-storey terraced shophouses which were transacted between RM888,000 to RM1.03 million.

On the market front, WTWY pointed out that property prices in Bintulu would continue to hold or even increase as evidenced by the upward revision of selling prices of the existing launches by property developers.

In the long term, an increasing demand for houses was expected due to several major on-going projects associated with SCORE, which would boost the development of Bintulu in the near future. It included, among others, the Samalaju Aluminium Smelter Plant, Borneo Paper & Pulp Mill and opening of larger scale oil palm plantations.