ABDUL KHAALIQ KAMUNRI

SX110141BQS11

CONTENT

1. 0

Property Market Study

1.1

Introduction to Market Study

1.2

Socioeconomic Profile
1.2.1

Population and Household Composition

1.2.2

Households Income

1.2.3

Employment

1.2.4

Economic Overview
1.2.4.1 Malaysia
1.2.4.2 Sabah
1.2.4.3 Tawau

1.2.5

Malaysia 2015 Budget

1.2.5.1 Sabah States 2015 Budget
1.2.5.2 Government Incentives for Residential Property

1.3

Housing Profile
1.3.1

Malaysia Property Market

1.3.2

Malaysia Property Outlook 2014

1.3.3

Property Stock Report

1.3.3.1 Supply of Residential Units in Malaysia
1.3.3.2 Supply of Residential Units in Sabah

1.3.4

Property Market Status

1.3.4.1 New Launches
1.3.4.2 Property Overhang
1.3.4.3 Unsold Not Constructed
1.3.4.4 Sabahs Property Market Status

1.3.5

Housing Supply and Demand

1.3.6

Market Competitor

1.1.

Introduction to Market Study

The purpose of this study is to identify the existing and future housing needs of
residents in Tawau. This study focus on the needs of three residents groups which is
middle income residents, families and workforce. To complete this property market study,
we use the most recent data and information on resident demographic, housing price and
future growth trends. This study will be devided into two categories which comprise the
socioeconomic profile and housing profile of the study area.

1.2

Socioeconomic Profile

This chapter will explain about the socioeconomic for the local community at this
time. In addition, the analysis will be conducted on the population density, the
relationship between the total population and current economic conditions that determine
household income and the financial ability of the population, especially in the study area.
Data from this study were collected from government agencies and through critical
observations to obtain information relevent to this study.

1.2.1

Population and Household Composition

In 2010, Malaysias population is 28.3 million and is projected to increase by 35%

to 38.6 million in 2040. Sabah is the second largest state in Malaysia after Sarawak. The
land area is equal to the combined land of several states in Peninsular or equivalent to
60% of area in Peninsular Malaysia. Sabah also the the second most populous state after

Selangor according to the latest estimate in 2013. Sabah indeed has one of the highest
population growth rates in the country.

The 2010 official statistics from Department of Statistic Malaysia stated that the
population of Tawau is nearly 400,000 making it the second highest populated district in
Sabah after Kota Kinabalu with 108 sex ratio. In terms of ethnic breakdown, Malay
comprise 59%, Chinese 10%, Indian 0.2% and others 1.5%. Non-Malaysian citizen also
have a high percentage where it covers almost 30% of the total population in Tawau.

Substantial growth occurred in Tawau during 1980 to 1991 by 6.97% growth.

However, growth has slowed in the recent decade with average annual growth averaged
3%. In terms of total population by age group, population of Tawau is relatively young
where 80% of 397,673 Tawaus population falling into 0-39 age group, 15.76% into 4059 age group and 4.24% into 60-75+ age group.

Table 1.1 : Total Population and Average Growth of Malaysia, Sabah and Tawau
No.

Malaysia

Area

Population

(KM2)

Average Growth
(%)

1.

Malaysia

132,364

28,334,135

1.8

2.

Sabah

73,902

3,120,040

2.1

3.

Tawau

6,125

397,673

Source : Cencus, 2010.

Ethnic Breakdown
59.0%

Malay

10.0%

Chinese

0.2%

Indian

1.5%

Others

29.3%

Non-Citizen

Figure 1.1 : Ethnic Breakdown for Tawau District (Source : Cencus, 2010).

Figure 1.2 shows the population density of Tawau district. Tawau town and
neighboring area are the most dense area within the city with average densities around
1001-100,000 person per square kilometres. Population density for the proposed site is
about 101-1000 person per kilometres, which allows for more residential and mix
development.

Figure 1.2 : Population Density of Tawau District

Source: Town and Regional Planning Department, Sabah

1.2.2

Household Income

Generally, the findings of the Household Income Survey (HIS) 2012 revealed that
the mean monthly income for Malaysians increased to RM 5,000.0 in year of 2012. It was
an increase of 7.2% per annum. According to Statistic Department Malaysia, household
income for Sabah in 2012 was RM 4,013 with an average annual growth rate for 2009 2012 period was 8.6% (Figure 1.3). The income growth rate for Sabah was above the
national average growth rate of 7.2%. Meanwhile the overal poverty rate has also
continued to decline from 19.7% in year 2009 to 8.1% in year 2012.

Figure 1.3 : Mean Montly Household Income and Annual Growth Rate 2012

Source: HIS 2012, Statistic Department Malaysia.

Figure 1.4 : Incidence of Poverty and Hardcore Poverty by State, Malaysia

Source : Household Income and Basic Amenities Survey Report (2012)

1.2.3

Employment

Agriculture is the major economic activity of the area which is planted mainly
with oil palm, rubber trees, cocoa and fruit orchads. In recent years, agriculture has
replaced timber as Tawaus main source of income. However, among the people who live
in the surrounding areas, there are also other occupational groups such as government
servants, drivers, clerical workers and people doing own business. Non-working groups
comprising housewifes, unemployed individuals and pensioners and small number in
various other jobs.

Figure 1.5 : Distribution of Employed Persons by Industry, Sabah (1980-2006)

Source : Yearbook of Statistics, Sabah (2006)

Socio-economic indicators released by the Statistic Department in 2011 showed

labour force participation rates were high for the state of Sabah with total sum of 67% in
which surpassed the average labor force participation rates of the country. This was an
increase of approximately 41,800 jobs in 2012. Unemployment rate also decreasing in
2012 to 5.4% compared to 5.6% in 2011. Unemployment rates has been lower than the
Malaysia average as a whole. In terms of gender, male comprise 85.8% while female
comprise 46.2%. Figure 1.5 shows the percentage distribution of employed persons by
occupation for Sabah.

New vacancies reported by state and industry 2012 released by the Ministy of
Human Resources shows that 190,307 vacancies available for the state of Sabah in which
143,657 vacancies are for the agriculture, foresty and fishery. According to the Sabah
Development Corridor (SDC) planning, Tawau District was designated as agro-marine
belt that focused on marine integrated cluster and palm oil industrial cluster (POIC) which
opens to the high employment to people of Tawau. Job growth in the exterior portions of
the city will be associated with population growth as retail and service opportunities
follow residential development.

Figure 1.6 : Employment Indicators in Sabah (2008-2012)

Source: Cencus, 2012

Table 1.2 : Distribution of Employed Persons by Occupation in Sabah

No.

Type of Occupation

Percentage distribution of employed

persons by occupation (%)

Managers

9.4

Professionals

7.5

Technicians and associate professionals

6.0

Clerical support workers

9.9

Service and safe workers

10.4

Skilled agricultural, foresty and fishery

27.9

Craft and related

9.1

Plant and machine operators

8.5

Elementary occupations

13.5

Source: State / District Data Bank Malaysia, 2012

1.2.4

Economic Overview

1.2.4.1 Malaysia

The Malaysian economy has been making commendable progress with strong
growth of Gross Domestic Product (GDP) which rose to 6.4% in the second quarter of
2014. Manufacturing and Services continued to drive the supply side coupled with a
sturdy pace in Agriculture as shown in Figure 1.7. The GDP growth this year will
probably exceeds the central banks forecast range of 4.5% to 5.5%. Malaysian economy
grew supprisingly because it was supported by continued robust aggregate domestic
demand and strong external demand with low unemployment and managable inflation.

The acceleration of Net Exports has increased to 8.8% while steady growth in
Private Final Consumption Expenditure to 6.5%. Export and imports for third quarter of
2014 increased by 2.0% to reach RM64.5 billion. Export grew 8.6% for the period of
January to September from RM524.5 billion previously. The trade surplus also increased
to RM 61.6 billion compared to RM 43.0 billion last year. Overall, the Malaysian
economy is expected to remain healthy and strong in 2015 as its growth will continue to
be driven by domestic and external sources.

Figure 1.7 : Malaysian Economic Growth Rate Q2 2014

1.2.4.2 Sabah

Sabah economic agenda focus on three thrust sectors namely Agriculture, Tourism
and Manufacturing. According to Statistic Deparment, Sabah has been recording strong
economic growth which grew from 1.3% in year 2011 to 4.1% in year 2012. The biggest
contributor sub-sector was the services, agriculture, mining and quarrying, manufacturing
and construction. A growth was supported by mega projects such as entry point project
(EPP) which generate increament of gross national income and new jobs.

Sabah Econonomic Development Investment Authority (SEDIA), the responsible

authority for planning, coordinating, promoting and accelerating the development of
Sabah Development Corridor (SDC) has attracted many foreign investors to Sabah. Major
projects that has been implemented to drive the state economy include the palm oil
industrial cluster (POIC), Sabah Oil and Gast Terminal (SOGT), Keningau Integrated
Livestock Centre, Sandakan Education Hub, the Oil and Natural Gas Cluster (O&G), the
Marine Industry Integrated Cluster, Sabah Ammonia-Urea Complex and Kinabalu Gold
Coast Enclave. Total investment value is RM 128 billion from 2008 to first quarter of
2014.

Table 1.3 : Comparison of Malaysia and Sabah GDP 2008-2014

Year

Malaysia

Sabah

(%)

(%)

2008

4.8

10.7

2009

-1.5

4.8

2010

7.4

2.7

2011

5.1

1.3

2012

5.6

4.1

2013

4.7

n.a

2014

6.4 (Q2/2014)

n.a

Source : Statistic Department

Figure 1.8 : Sabah Development Corridor Plan

1.2.4.3 Tawau

Tawau community has greatly been enhanced with the development and
introduction of other infrastructural amenities in the region. The rapid development in the
diverse economy of Tawau from agriculture, timber, shipping, agro-industry and
commercial developments have attracted many people in this region. In addition, the
manufacturing sector has also grown rapidly in the area which saw the development of
some major industrial areas in Tawau such as Tanjung Batu Industrial Area and Pasir
Putih Industrial Area.

Figure 1.9 : Development Growth Direction of the Study Area

1.2.5 Malaysia 2015 Budget

Malaysias 2015 budget was presented by the Prime Minister Dato Sri Mohd
Najib Razak in the Dewan Rakyat. This budget shows a responsive government to rising
cost of living and ensuring 2014 economic momentum is sustained. The 2015 budget will
allocates a total of RM273.9 billion to two types of expenditure, namely Operating
Expenditure and Development Expenditure. Of the amount, RM223.4 billion will be used
for Operating Expenses while the remaining RM50.5 billion will be used for
Development Expenditure. Malaysia 2015 budget breakdown is shown as follows.

Development
Expenditure,
50.5

Operating
Expenditure,
223.4

Figure 1.10 : Summary of 2015 Budget Allocation

Table 1.4 : 2015 List of Expenditure

Operating Expenditure

Development Expenditure

(RM) Billion

(RM) Billion

Fixed Charges & Grants

116.4

Economic Sector

29.3

Emoluments

65.6

Social Sector

12.6

Supplies & Services

38.1

Security Sector

4.9

Purchase of Assets

1.5

Contigencies

Others

1.8

General Administration

Total

223.4

Total

Source : The 2015 Budget Speech, BNM

2
1.7
50.5

1.2.5.1 Sabah States 2015 Budget

Chief Minister (CM) of Sabah has tabling the budget of the state for year 2015 at
the State Assembly. Sabah will receive RM4.07 billion from the 2015 Federal budget as
announced by the Prime Minister to implement various projects in Sabah. The state
government will only spend 3,812.79 million for 2015 which create a surplus amounting
to RM49.23 million.

According to CM, development of Sabah will be focusing on sectors that could

uplift peoples prosperity. For that reason, RM 1,882.15 million will be allocated for
Operating Expenditure and the remaining RM 1,1930.64 will be allocated for Special
Expenditure.

Development Expenditure for the year of 2014 involves a sum of RM 1,308.55

million consisting of RM746.84 million of state fund and RM561.71 million contribution
from the Federal Government. A total of RM1.25 bilion is allocated to the infrastructures
and public utilities such as the building and maintenance of urban and rural roads, slopes,
bridges and traffic and road safety management.

Administration,
56.84

Social,
229.61

Contigency, 5

Economics,
455.39

Figure 1.11 : Distribution of the 2015 State Development Fund

Figure 1.12 : Distribution of The 2015 Supply and Development Allocation by

Ministries

1.2.5.2 Government Incentives for Residential Property Market

The Government has undertaken continuous efforts to address the difficulties of

the middle income and low income group in owning an affordable house. A total of
RM1.9 billion was allocated in 2013, RM1.724 billion in 2014 and RM1.3 billion in 2015
to assist the construction of 123,000 units (2013), 133,000 units (2014) and 143,000 units
(2015) of affordable housing by government agencies such as Perumahan Rakyat
1Malaysia (PR1MA), Syarikat Perumahan Negara (SPNB) and

National Housing

Department (JPN). The private sectors also expected to built 90,000 units affordable
house this year.

In 2014, Pr1ma focus on providing affordable house to the middle income groups
nationwide. Pri1ma has planning to build 80,000 units of affordable house with an
allocation of RM 1.0 billion. 30,000 units will be built in collaboration with private
developers and each unit will be sold at a price of RM100,000 to RM 400,000. JPN will
built 17,473 residential units with an allocation of RM724 million. However, the numbers
of residential units to be build by JPN increased to 26,000 units in the 2015 budget with
an allocation of RM 644 million.

SPNB focus on providing affordable housing particularly for lower income

groups. RM 320 million was allocated to build 26,885 residential units including 1855
medium-cost apartments in 2013 but the number of units to be build in 2014 dropped to
26,122 comprising of 15,122 affordable houses, 3000 units Rumah Idaman Rakyat and
8,000 units of Rumah Mesra Rakyat. Subsidy RM 30,000 per unit will be provided for
Rumah Mesra Rakyat.

Civil servants will benefit through 1Malaysia Civil Servant Scheme in which the
government will add housing units to be built throughout the country including the
addition of 1290 units in Papar. In addition, the minimum eligibility limit will be
increased up to RM600,000 compared to RM80,000 to RM120,000 previously.
Developers who participate in the providing of affordable housing schemes eligible for
facilitation fund up to 25% of project cost.

The government also launch a housing incentives starting from 2013 to encourage
private developers to build more affordable housing through MyHome Scheme. My First
Home Scheme was launched to asist young adults to own their first house. The conditions
of this scheme has further eased by the government which improvement was made to the
limit of monthly income from RM 3,000 and below previously to RM 5,000 or joint
income of up to RM 10,000. The 50% reduction of stamp-duty exempt will also be extend
until the end of 2016.

Table 1.5 : MyHome Scheme Price Range

Type

MyHome1
MyHome1
Sabah & Sarawak

Selling Price

Actual Price

Minimum

Household

(RM)

(RM)

Built-up Area

Monthly

(Sq feet)

Income (RM)
3,000 4,000

80,000-120,000

50,000-90,000

800

90,000-120,000

60,000-90,000

800

90,001

MyHome2

120,001 - 200,000

MyHome2

120,001

90,001

250,000

220,000

Sabah & Sarawak

170,000

3,000 4,000

850

4,001 6,000

850

4,001 6,000

Source: KPKT, MyHome 2014

1.3

Property Market and Housing Profile

This chapter will explain about the property market in our country and
subsequently focus on the location of the study. Analysis will be carried out on the
property market in detail to see supply and demand for this market. Analysis was
conducted on the type of property that has good sales performance so that investment
returns can be maximized. Next, the market competitors are also included to ensure that
the proposed development has the advantage to the company in terms of sales. In
addition, the information stated is with reference to the latest issue of government
publications.

1.3.1 Malaysia Property Market

Altough GDP in 2013 was at a moderate level, growing only by 4.7% in 2013 but
in the third quarter of 2014 economic growth reached 6.4%, the highest GDP since 2011.
Overall economic growth was led by the services and manufacturing sectors each
contributed 55.2% and 24.5% of GDP. Domestic demand remains positive with 7.6%
compared with 10.6% in 2012 driven by continued growth in household spending and
business and public sector expenditure.

According to Valuation and Property Services Department (JPPH), the growth of

the property market in 2013 has increased moderately. This sector has suffered a drop of
the number of transactions in 2013 compared to previous year. Despite the number of
transactions decreased to 381,130 but the transaction value is increased by 6.7% or
RM152.37 billion compared to 427,520 transactions worth RM142.84 billion in 2012.

The sales performance is moderate in which the number of units launched

decreased by 14.9%. Performance of unsold units decreased because of decreasing in total
numbers of residential units from 15,091 in 2012 to 13,547 units in 2013. Residential subsector continued to lead the real estate market activity taking 64.6% share. The low base
landing rate (BLR) of 6.53% and the weighted average lending rate (ALR) to 5.4%
continue to support the domestic property market. Housing approvals also decreased from
47.4% in 2012 to 22.5% in 2013. However, the number of loans issued for the purchase of
residential property showed an increase of RM10.3 billion this year.

The commercial sector declined by a lesser amount this year by 34,289

transactions worth RM35.56 billion. Industrial property transaction this year fell 15.7%
after a contraction of 4.7% in 2012. Similarly, agriculture transactions value also declined
7.0% from RM14.29 billion last year to RM13.28 billion. In conclusion, the real estate
market acitivity is slow as a whole in 2013 with all sub-sectors recorded a decrease in the

number of transactions. However, the value of transactions for all sub-sectors rose but in a
lower rate.

1.3.2 Malaysia Property Outlook For 2014

In order to ensure economy continues to grow, Budget 2014 has been drafted to
implement various programs and projects to boost economy as a whole. Private
investment expected to grow supported by the implementation of Economic
Transformation Programme (ETP) worth of RM1.4 trillion such as investment in oil and
gas, agriculture, tourism, and construction sector is expected to increase private
investment activity. Other infrastructure work including allocation of RM980 million for
the rehabilitation and upgrading of 437KM rural roads and RM 500 million for the PanBorneo Highway project.

1.3.3 Property Stock Report 2014

1.3.3.1 Supply of Residential Units in Malaysia

Summary of Residential Property Stock in Malaysia

Total Units

60.000
50.000
40.000
30.000
20.000
10.000
0.000

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Completions

19.439

23.843

13.917

25.061

16.480

New Planned Supply

35.680

45.019

33.859

44.743

51.372

Starts

33.542

39.318

31.279

31.759

38.587

Figure 1.13 : Completion, New Planned Supply and Start of Residential Property
From Q2 2013 to Q2 2014 in Malaysia

There were 4,769,328 of residential units available in Malaysia at the end of Q2

2014, 72,074 unit increase over the second quarter of 2013. During Q2 2014, residential
unit completed declined to 16,480 compared to 25,061 units in previos quarter (Q1/2014).
However, the incoming supply grew 8.6% in Q2 this year compared to the same quarter
last year (Q2/2013). So far, 686,902 residential units are under construction in which
there is an increase 15,279 in the last three months. For the new planned supply, Q4 2013
recorded the lowest (33,859) but increased in Q1 2014 (44,743) and Q2 2014 (51,372).

1.3.3.2 Supply of Residential Units in Sabah

Summary of Residential Property Stock In Sabah

4000
3500
Total Units

3000
2500
2000
1500
1000
500
0

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

512

1078

New Planned Supply

55

898

899

1706

Starts

24

1746

3594

82

3525

Completions

Figure 1.14 : Completion, New Planned Supply and Start of Residential Property
From Q2 2013 Q2 2014 in Sabah

Sabah has existing stock of 157, 421 as at Q2 2014, a slight increase compared to
earlier quarter with an average of 1,586 units per quarter. However, the number of unit
completed within a period of one year only 1,590 units were completed during Q2 2013
and Q2 2014 respectively, with 512 and 1,078 units. Incoming supply slightly increased
by 45,879 units to date compared to the same quarter last year was only 39,447 units. But

the incoming supply is expected to increase due to the residential units under construction
in Q2 2014 stood at 42,354 units, while the new planned supply was 1,706 units and starts
3,525 units.

A summary of the existing stock, completion, incoming supply, starts and planned
supply for the study area as of second quarter 2014 are listed in Table 1.6.

Table 1.6 : Supply of Residential Units in Tawau

Year/Supply

Existing

Completion Incoming

Stock

Under

Supply

Construction

Starts

Planned
Supply

Q2 2013

19,366

4,070

4,046

24

702

Q3 2013

19,366

4,070

4,070

757

Q4 2013

19,366

4,070

4,070

757

Q1 2014

19,437

4,060

4,060

793

Q2 2014

19,437

4,060

4,060

793

Source : NAPIC, Residential Property Stock (Q2/2013 Q2/2014)

1.3.4

Property Market Status Q1/2014

1.3.4.1 New Launches

Figure 1.15 : Source; Property Market Status Q1 2014, Napic

Statistics show that as of the end of Q1 2014, a total of 65,758 new resident units
have been launched throughout the country since Q1 2013 to Q1 2014. In Q1 2014, the
developer has provided a total of 6,339 units compared to 17,836 units in the same quarter
last year. This amount is very low, a decrease of 49.7% compared to units launched in the
last three months. Units sold showed that Q1 2013 is the highest number of 5,087 units,
followed by Q2 2013 (3,322 units), Q3 2013 (1,959 units), Q4 2013 (2,007 units) and Q1
2014 (1,891 units). However sales performance during Q1 2014 was the highest
compared to the past four quarters.

In terms of residential property launched by type, terrace houses contributed the

highest amount (15,085 units) followed by service apartment (6,309 units) condominium
and apartment (5,716 units), 2-3 storey semi detached (2,493 units) and cluster (2,021
units). Terraced house also has a very good demand with higher sales volume by 6,853 of
units sold. In addition, the high-rise properties also have a good sales with a total 3,272
units. Summary of units launched, units sold and sales performance by type of residential
property is shown below.

Figure 1.16 : Summary of Launched and Sold Units and Sales Performance by
Types

1.3.4.2 Property Overhang

Figure 1.17 : Source: Property Market Status Q1 2014, NAPIC

The number and value of completed units which remained unsold after nine
months launching in Q1 2014 increased from 17,848 units to 18,682 units (4.45%) and
from RM 6,073.40 million to RM 6,446.91 (5.69%) compared to previous quarter. These
overhang units comprised of residential property (13,503 units & RM 4,803.62 million),
shops property (4,785 units & RM 1,471.77 million) and industrial property (394 units
and RM 171.52 million). Residential property represent the highest number of property
overhang in Q1 2014 with 13,503 units, followed by shops property (4,785 units) and
industrial property (394 units). Although the number of property overhang in Q1 2013
was higher than other quarters, but the values is lower than Q1 2014.

1.3.4.3 Unsold Not Constructed

Figure 1.18 : Unsold Not Constructed Propertys by Sub-sectors (Q1/2013-Q1/2014)

Numbers of units unsold not constructed decreased by 6.3% from 15,690 (Q4
2013) to 14,700 (Q1 2014). Performance for residential and shops property are also good
compared to previous quarter with a decreased in numbers of unsold units by 4.7% (640
units) and 20.7% (372 units) respectively. Industrial sub-sectors showed an increase of
8.5% unsold units to 292 units. Analysis of year-on-year from Q1 2013 to Q1 2014
showed a slight decrease for all sub-sectors. The residential sub-sector declining 1.02%
from 13,129 units, shops 4.04% from 1,483 and industrial 18.26% from 345 units.

1.3.4.4 Sabahs Property Market Status

Sabah, Sarawak and Selangor had the most number of new housing units launched
in Q1 2014 period. Developer has launched 863 units of residential property with unit
sold of 372 units within three month after launched. Sabah recorded the third highest sales
performance of new housing in Q2 2014 with 43.1% were taken up.

Figure 1.19 : Sales Performance of New Housing Scheme in Selected States

Figure 1.20 : Sales Performance of Selected Newly Launched Houses from Q3/2013Q1/2014

Statistics provided by NAPIC shows a total of 1,837 new residential units

launched in Sabah from Q3 2013 until the end of Q1 2014. There are two types of houses
launched and sold in Sabah. By property type, condominium/apartment which was
launched since 9 months ago was the highest at 66% (1,203 units) of total supply, while
the remainder is a landed property (634 units). However, landed property have a higher
number of units sold and sales performance despite less offered by developers. Units sold
and sales performance for landed property comprising of 447 units and 70.5%, while for
high-rise property 310 units and 25.8% respectively.

1.3.5 Housing Supply and Demand

Supply refers to a developers who create new product in the industry while the end
user such as owner or renter will form a demand. The demand on the residential property
always increases every year. The main determinants of demand of residential property are
the population and households income because the more people in the economy, the
greater the demand in this industry.

Construction of a property involves the use of various resources such as labor,

construction material, financial and expertise of the project team. All input in construction
will determine the price of the property. By analyzing sales performance, existing supply,
current approval of property development in specific area and so on can help developers
to make decisions about the type of supplies that will be offered and determine a
reasonable price of the property. Factors that influence both supply and demand in this
industry have been discussed in detail previously.

The residential industry makes up an important part of Malaysian economy. There

was a significant increase recorded in the percentage of flats, apartments and
condominiums from 12.6% in 2000 to 19.9% in 2010 (Cencus, 2010). It happens because
of the rising land cost and the scarcity of feasible land resulted in the increasing of
apartment and condominium development over the years. The growing trend in
developing apartments in Sabah can be affirmed with recent launches in the year of 2013
and 2014.

According

to

Sabah

Housing

and

Residential

Developers

Association

(SHAREDA), their members producing a total Gross Development Value (GDV) of RM

7.56 billion in 2013. High-rise development contribute RM 2.056 billion from the total
GDV which is the construction of 6804 units of condominium and apartments, landed
property 4421 units (RM1.85 billion) and mixed development 2014 units (RM2.006

billion). Figure 1.21 shows that landed and condominium/apartment property led the
housing development in Sabah. However, according to NAPIC Tawau division not
producing any apartment/condominium development in 2013.

Figure 1.21 : Sabah Property Development Products in 2013

Source: SHAREDA Property Development Annual Report (2013)

Table 1.7 : Total Unit of Residential Unit Built by SHAREDA Members in 2013
No

Regions

Condominium and

Landed

Apartment

Property

GDV (RM)

GDV(RM)

Unit

000000

Total GDV

RM

Unit

000000

000000

West Coast

1,651

4692

830.878

1,555

2,481.878

Lahad Datu

85

320

173

336

258

Interior Region

267.9

1,087

267.9

Tawau

412.4

1,037

412.4

Sandakan

250

1440

141

406

391

Kudat

70

352

70

2,056

6,804

1,825.178

4,421

3,881.178

TOTAL

Source; SHAREDA Property Development Annual Report (2013)

Single Storey
Terrace
2-3 Storey
Terrace
Single Storey
Semi-D
2-3 Storey
Semi-D

Supply

New Planned

Supply

Planned

Starts

Construction

Under

Supply

perty Stock

Stock

Property/Pro

Incoming

Type of
Existing

No

Completion

Table 1.8 : Summary of Tawaus Property Stock

2,975

1,337

1,337

622

5,023

850

850

87

382

12

12

2,862

372

372

26

Detach

2,046

41

41

58

Cluester

572

2,730

528

528

Low Cost
House

Low Cost Flat

2,577

Flat

48

900

900

222

20

20

19,437

4,060

4,060

793

10

11

Service
Apartment
Condominium/
Apartment
Total

Source : NAPIC Property Stock Report, Q2 2014

There are several estimates of the number of residential units in Tawau. According
to the Property Stock Report published by NAPIC, Tawau have existing stock amounted
to 19,437 units of residential property available as of Q2 2014. Landed properties
represent 16,590 or 85% of the exisiting stock in the residential market while the
remainder was comprised of 2,799 units (15%) of high-rise property. Besides that, only
4,060 residential units is under construction and new units launched as shown in table 1.8.

1.3.6 Market Competitor

As reported by SHAREDA, local developers have started planning for the

construction of more landed and high-rise properties in Tawau for 2014 to 2018 period.
Two types of residential properties to be built is terrace and apartment totaled 3,267 units.
Table 1.9 shows the project name and number of units that will be built by other
developers.

Location is among the most important factors in the development of property

whether it is residential, industry or other types of property. Good location can attract
prospective buyers as sites near the city center, the infrastructure available in the location
and good surrounding.

Generally, the existing location proposed by Karun Developer is very strategic

because it is located just 6KM from the city center and 4KM from the new township.
Location of the nearest competitors site is 15KM from the city center, while the most
distant location is 45KM which is located in the Balung area. Figure 1.22 shows the
location to be developed by other competitors.

Table 1.9 : Planned Supply in Tawau by SHAREDA Members

No.
1.

Project Name

Property Type

Project Status

No. of Units

Taman Sawit Phase 3a

Terrace

DP approved by

91

local authority
2

Ria Heights (Phase1)

Terrace

DP submitted to

469

Central Board
3

Ria Heights

Terrace

(Phase 2)
4

Proposed 194 units, Mile 8

161

Development Stage
Terrace

Jalan Apas
5

Design

DP sumbitted to

194

Central Board

Bandar Sri Indah Affordable

4-Storey

Design

Housing (Phase 1)

Apartment

Development Stage

Bandar Sri Indah Affordable

4-Storey

Design

Housing (Phase 2)

Apartment

Development Stage

Ria Heights

Apartment

Design

256

816

1024

Development Stage
8

Taman Sawit Phase 4a

4-Storey

DP approved by

Apartment

local authority

Total

Source : SHAREDA 2013 Property Development Annual Report

256

3,267

Figure 1.22 : Competitors Site

Reference

1.

JPPH (2014). Property Market Status Report. Q2 2014.

2.

JPPH (2014). Residential Property Stock Table Q2 2014.

3.

Department of Statistics, Malaysia (2014). The Malaysian Economy in Brief

4.

Department of Statistics, Malaysia (2014). Quarterly Construction Statistics 2014

5.

Mohd Najib Abdul Razak (2014), The 2015 Budget Speech. Introducing the
Supply Bill (2015)

6.

Musa Aman

(2014), The 2015 Budget Speech. Focusing on Sustainable

Development for The Peoples Well-being.

7.

SEDIA (2014). Sabah Development Corridor 2008-2025. ABC Media Conference

and Workshop 2014. 22-25 May. Ho Chi Minh City, Vietnam

8.

SHAREDA (2014), Property Development Annual Report

9.

Department of Statistics, Malaysia (2013). State/District Social Statistics.

Malaysia

10.

JPPH (2013). Malaysian Property Market 2013. Press Release.

11.

Department of Statistics, Malaysia (2012). State/District Data Bank. Malaysia

2012

12.

Department of Statistics, Malaysia (2012), Household Income and Basic

Amenities Survey Report