Sabah is located on the Eastern shore of Malaysia and one of the biggest states.
Many foreigners haven’t heard about Sabah, nor have they heard about its growing capital, Kota Kinabalu, often referred to as KK. The economy is growing fast in Sabah, especially in the capital, still prices are comparably cheap to many other countries in the region.
With investment pouring in and great growth potentials, you shouldn’t ignore Sabah if you plan to invest in Malaysia. In this article, I explain the basics when investing in Sabah property.
Sabah property market outlook
Sabah has a number of major cities, two of the most renowned are Kota Kinabalu and Sandakan. Even if the province has a population of almost 4 million and a number of other cities, the main focus will be on these two cities in this article.
Kota Kinabalu (the capital city) draws the most attention where property has been cheap in the past, but prices have doubled in a time period of just a couple of years.
Sabah is predicted to do well in the long run, but the property market has cooled off a bit, the price-to-income ratio has simply become too unreasonable and some developers have put projects on hold.
But with increasingly more foreigners getting aware about the benefits of the MM2H visa, often having a stronger purchasing power, the amount of tourists have increased by double digits on a yearly basis.
When places like Kota Kinabalu and Sandakan get more attention, lifestyle- and investment property will continue to attract overseas buyers.
Sabah’s economic growth is one of the strongest in Malaysia
Not only do Sabah have the most beautiful beaches (according to a handful of people I’ve met in Malaysia at least), the economic growth is also among the strongest.
Much investment is being poured in, you can see hotels and shopping malls popping up here and there, not to neglect, the palm oil industry is doing well too. Flight companies have introduced direct flights from a number of countries in the region, attracting visitors and investors from Korea, China, Japan and Taiwan.
Nationalities of these countries have simply started to see Sabah’s potentials.
Sabah has started to attract many retirees and visitors for sure, but is also involved in other industries except for tourism, like manufacturing, oil and agriculture.
Minimum investment requirement in Sabah
You’re required to invest a minimum entry amount when buying property, the requirements differ between states, so it’s important that you’re aware the different regulations that apply.
Penang is one of the most sought after places to be, even if foreigners and many locals tend to buy in the Northern parts of the Island, land is scarce and a hefty minimum investment of RM 3 million applies to villa buyers.
This makes Sabah even more attractive, where you need to put up RM 500.000 at a minimum.
Property prices in Kota Kinabalu
Property is still fairly cheap and I recommend you to buy in the city center. The price per square meter averages at a bit more than RM 7500 per square meter at the moment I’m writing this article, which means you can buy an apartment of almost 65-70 square meters and reach the minimum investment requirement of RM 500.000.
Just making a comparison, in Kuala Lumpur the average price is RM 12000 – 13000 per square meter, Ipoh has many investment opportunities as well and prices averages at a bit more than RM 5000 per square meter.
Property prices in Sandakan
Prices are comparably cheap in Sandakan compared to Kota Kinabalu, the price per square meter averages at around RM 3900, which is almost half compared to the state capital.
Even if Kota Kinabalu is the business hub, where prices will continue to grow much, Sandakan should definitely not be neglected.
Most foreigners tend to buy new or off-plan property, something you should beware of, as you need to have an exit strategy. The prospects you have when selling a property should be equally important as when buying one.
Buying in strategic areas with growth potentials, close to public transportation, schools or other amenities are crucial, to secure that you’re able to resell your property with a good profit. In Kota Kinabalu, investing close to golf courses, the ocean or the airport can be wise choices. Some interesting new developments include:
- Aeropod (developed by SP Setia Bhd)
- Kota Kinabalu City Waterfront
Real estate agents in Sabah
It’s important that you work with a reputable real estate agent that has experience of helping foreign buyers, they should also have a well-rounded local knowledge of interesting areas.
Some of the most popular real estate agencies in Sabah are:
- C H Williams Talhar & Wong
- Knight Frank
- Kimly Realty
- Carey Real estate
Property prices have increased much in Sabah the past decade, still many foreigners haven’t even heard bout this state. Two of the most promising cities are Kota Kinabalu Sandakan, that will continue to grow in the long term.
Compared to Kuala Lumpur and Penang, prices are way cheaper, giving you great opportunities to find a place to either use as a retirement retreat or for investment purposes.
The minimum investment requirement is not so high either, and set to RM 500.000.
I also recommend you to read my separate article that explains how you can buy property in Malaysia as a foreigner.