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Sabah’s residential market holds steady, underpinned by affo...

Sabah’s residential market holds steady, underpinned by affordable housing

29 Jan 2026
Sabah’s residential property market remained resilient in the third quarter of 2025 (3Q2025), supported by steady transaction activity concentrated in the affordable and mid-market segments, despite lingering affordability pressures and oversupply concerns in the premium high-rise and retail commercial space.
 
Rahim & Co International Sdn Bhd’s Kota Kinabalu director, Max Sylver Sintia, says in The Edge Malaysia | Rahim & Co Kota Kinabalu Housing Property Monitor 3Q2025 that residential transactions in Sabah reached 1,415 units in total in 3Q with a combined value of RM614.2 million, representing year-on-year (y-o-y) increases of 27% in volume and 34.4% in value. On a quarter-on-quarter basis, transaction volume dipped marginally by 1.7%, while transaction value rose 4.9%, suggesting continued buyer selectivity alongside firmer pricing for transacted assets. 


“The market continues to be underpinned by demand for affordable housing, supported by public and state-led initiatives, as well as a gradual recovery in tourism and related economic activity,” notes Max, adding that infrastructure spending and targeted housing programmes remain key stabilising factors.
 
Looking ahead, sentiment remains cautiously optimistic. “While affordability constraints and premium-sector oversupply persist, the market is expected to gain a firmer footing in 2026, supported by Budget 2026 measures, 13th Malaysia Plan infrastructure rollouts and targeted programmes such as Rumah Mesra Sabah Maju Jaya, the Sabah People’s Housing Scheme and the Sabah–Malaysia My Second Home (S-MM2H) initiative.


New launches signal continued confidence
 
Despite measured buyer sentiment, developers continued to introduce new high-rise offerings in strategic waterfront and urban locations during the quarter, reflecting longer-term confidence in Kota Kinabalu’s lifestyle and tourism-driven appeal.
 
In 3Q2025, Bedi Development Sdn Bhd (a subsidiary of Exsim Development Sdn Bhd) launched The Bedrock, a high-rise serviced suite development within the Jesselton Docklands master plan.
 
Spanning 2.543ha, the project comprises two towers — Tower A (27 storeys) and Tower B (25 storeys) — offering a total of 1,080 units. Unit sizes range from 351 to 700 sq ft across 13 layouts, including studios, one-bedroom units, dual-key configurations and corner units. Launch prices range from RM486,500 to RM1.05 million, translating into RM1,356 to RM1,496 per sq ft, with completion targeted for 1Q2030. Facilities include an infinity pool, a rooftop boxing gym, a forest hammock garden, co-working spaces and community-oriented amenities.


Meanwhile, Jesselton International Sdn Bhd unveiled The V, a large-scale, high-end, mixed-use serviced suite development in Likas Bay in Jalan Tun Fuad Stephens. The 10-acre project will deliver 1,754 units across five unit types ranging from 425 to 1,090 sq ft, from studios to two-bedroom units with terraces, most offering unobstructed sea views. Prices range from RM327,300 to 
 
RM1.27 million, or RM770 to RM1,165 psf, with completion also slated for 1Q2030. The development features an extensive lifestyle-focused facilities package, including wellness amenities, sports courts, co-working spaces and sky-level communal areas.
 
“These launches underscore developers’ continued focus on lifestyle-oriented, well-located projects, particularly along the waterfront, even as the broader market remains price-sensitive,” Max observes.
 
He adds that the continued launch of high-rise and serviced apartments in Kota Kinabalu has heightened the risk of near- to medium-term oversupply and warrants close monitoring. 
 
“While well-located developments continue to attract demand, supply growth increasingly outpaces population and household formation, keeping demand selective and price-sensitive, especially outside peak tourism seasons. This may weigh on absorption, rentals and occupancy, particularly for undifferentiated projects, although initiatives such as the S-MM2H programme and affordable housing policies should provide gradual support to market balance,” says Max.


Transaction activity anchored by affordable housing
 
Residential properties priced below RM300,000 continued to dominate Sabah’s housing market in 3Q2025, accounting for 611 transactions, or 43.2% of total volume, valued at RM124.36 million. This was followed by properties priced between RM300,001 and RM500,000, which recorded 454 transactions (32.1%) worth RM179.4 million. Homes priced between RM500,001 and RM1 million accounted for 281 transactions (19.9%) valued at RM192.22 million, while properties above RM1 million comprised just 69 transactions (4.9%) but contributed RM118.21 million in value.
 
Terraced houses remained the most actively traded property type, with 1-, 2- and 3-storey terraced units accounting for 555 transactions (39.2%) worth RM228.21 million. Condominiums and apartments followed with 364 transactions (25.7%) valued at RM137.83 million. Semi-detached houses recorded 149 transactions, while detached homes accounted for 103 transactions during the quarter.
 
Geographically, the combined districts of Kota Kinabalu, Penampang and Putatan continued to dominate the market, recording 745 residential transactions or 52.7% of Sabah’s total, worth RM399.42 million. Year on year, transaction volume in these districts rose 37.7%, while transaction value surged 47.5%, reflecting sustained demand in the state’s main urban corridor.


Prices edge higher, yields remain stable
 
Price growth across monitored residential samples remained modest but positive. Two-storey terraced houses recorded an average y-o-y price increase of 2.3%, led by Ujana Kingfisher (+3.01%) and Millennium Height (+2.99%). One-storey terraced houses registered a stronger growth of 3.66% y-o-y, with Taman Tuan Huat posting the highest increase at 3.81%.
 
Condominium prices recorded an average y-o-y growth of 1.36%, with Likas Square (+3.5%) and The Peak Condominium (+2.2%) leading gains. Average condominium prices across the monitored samples stood at RM557 psf in 3Q2025.
 
Rental performance remained stable, with modest y-o-y increases across both landed and high-rise segments. Average gross yields ranged from 3.85% for 1-storey terraced houses and 3.69% for 2-storey terraced houses, while condominium yields averaged 4.1%, led by 1 Borneo Condominium at 5.22%.


Steady recovery
 
Overall, Sabah’s property market in 3Q2025 reflected resilience, with demand anchored by affordability, infrastructure-led growth and improving tourism fundamentals. While premium residential and retail segments continue to face oversupply challenges, opportunities are expected to remain concentrated in affordable and mid-market housing, industrial and logistics assets, hospitality-led mixed-use developments and well-located shop offices.
 
“With continued federal and state funding, improving connectivity and targeted housing and investment policies, Sabah’s medium-term property outlook remains constructive,” Max concludes.


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