Sarawak Property Market Report 1st Half of 2019



Overview

ln Sarawak there were 11,843 transaction in H1 2019 worth RM 3,51 billion, an increase of 7.4% in volume and 23.2% in value compared to H1 2018 (11,024 transactions worth RM 2.85 billion).

The Residential sub-sector continued to hold the majority of market share at 41.9% followed by the agriculture (38.3%), development land (9.0%), commercial (8.6%) and industrial (2.2%) sub sectors.


Residential Property

The state recorded 4,963 transactions worth RM 1,38 billion in H1 2019, an increase of 13.3% in volume and 15.4% in value against H1 2018 (4,381 transactions worth RM 1,19 billion). This indicates a healthy recovery compared to the performance in th last 3 years, in which we saw a decline in volume of transactions since H1 2016, and a small increase in value of transactions except H1 2016 where there was a 11.3% decline in transacted value. Terrence houses continued to dominate the residential sub-sector with 44.8% share which equates to 2,221 units.


New Launches

The number of new launches saw a significant decline by 71.1% to only 539 units, against H1 2018 (1,866 units) This is good for the property market as we are facing problems with increasing numbers of overhang units. Most of the new launches were high rise residential buildings like condominium and apartments, which take up more than 31.2% (168 units) of the total.


Market Status

Sarawak showed an increase of 14.1% of volume and 16.5% in value for overhang units in the residential sub-sectors. There were a total 1,611 overhang unit worth RM 713,19 million in H1 2019 while there were 1,412 overhang unit worth RM 612,26 million in H2 2018. Despite this, the unsold under construction saw an improvement of 7% form 6008 units in H2 2018 down to 5586 units in H1 2019. There 334 unit unsold not constructed which is the same as H2 2018.


Construction Activity

With growing concern over the oversupply of properties, construction activity has slowed down significantly. Completion saw a decline of 71.1% to 1233 units, against 4266 units in H1 2018. Whilst the new planned supply saw a drop of 50.4% to 2124 units compared to 4282 units in H1 2018. New starts also saw a downward movement of 16.6% to 2439 units against H1 2018 with 2925 units.


Price

The prices of the residential property remained stable across the board with some positive growth recorded in selected schemes. Houses located in strategic locations especially within the vicinity of higher learning institutions and served with efficient road linkages saw capital appreciation. Stratified residential types saw a decline in several area.


House Price Index

As at Q2 2019, the All House Price Index in Sarawak saw a slight decrease by 0.2% to 172.8 points from 173.2 points in Q2 2018. The Average All House price stood at RM 440,645 as at Q2 2019, a slight decrease against Q2 2018 with average of RM 441,675.



Market Focus

Sarawak has shown strong resilience in sales as compared with the rest of Malaysia. The Malaysian economy has been facing strong headwinds since 2017, whilst the 3 main drivers of th economy (oil and gas, timber and oil palm) are all facing challenging times. In Sarawak, there are 2 "pistons" that has helped the economy, namely the construction sector and in a smaller scale, the shipping industry. We predict that with the reduced new launches and decline in completion, the market will be able to absorb some of the overhang by 2020, after which the house prices should increase form 2021, in tandem with the improvement in the economy.

We predict by 2020, the trade war between US and China would be settled and therefore world economy will improved.


Extracted from NAPlC's report




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