KOTA KINABALU: Yayasan Islam Sabah disagreed with prominent valuer Datuk Chong Choon Kim that an anticipated post-GE13 cutback in federal government’s spending on infrastructure development in the state are among factors casting a pall over Sabah property market outlook in the next five years.
Its secretary general Raden Kakung said many members of Yayasan Islam Sabah were surprised by the CH Williams & Talhar Sdn Bhd managing director’s view that one of the factors contributing to this gloomy forecast was that the Federal Government will not be spending further on infrastructure such as roads, schools and hospitals in Sabah.
Chong also doubted any forthcoming urban road development in the state capital as it is an opposition-held area.
“It seems that the federal government becomes the scapegoat. In actual fact the main reason behind this gloomy forecast is that the property development in Sabah is overbuilt – the schools, hospitals, roads, commercials and residentials.
“With the sky rise of the properties price in the state capital, the only buyers who can afford to buy and sustain the property market are the contractors themselves,” Raden said in a statement yesterday.
He said Chong is fully aware that those days of the negotiated contractors who were reportedly making 30-50% profits are now gone.
“The federal government practises open tender since a few years ago. In any case, the number of contractors are very limited, maybe not more than 100 to 200 who will have surplus funds for buying exorbitant building prices. Normally these people only buy penthouses,” he said.
Raden listed six main reasons for the gloomy Sabah property market as follows.
1. Oversupply – there are more than 1,000 approvals given over a few years. No proper planning was being carried out;
2. Large buildings for offices and residential were built without consideration for the needs of the city;
3. Buyers are mostly the upper and middle classes, and these are mostly small oil palm estate owners;
4. The properties are too expensive;
5. Lack of foreigners buying houses due to government laws and policies which are not conducive for foreigners to settle in Sabah;
6. The days of the bank giving 100% loans are over.