SARAWAK’S property market is undergoing a transformation, influenced by post-pandemic recovery, shifting buyer preferences and government-driven infrastructure projects.
Despite challenges like rising development costs, labour shortages and lengthy regulatory processes, industry players remain optimistic about the market’s resilience and growth potential.
In a discussion with Sarawak Housing and Real Estate Developers’ Association (SHEDA) council members namely President Augustine Wong, Deputy President Louis Ting, Advisor Datuk Alex Ting, and member Hanizam Hashim — Sarawak Tribune gained valuable insights into the current state of Sarawak’s real estate sector.
Market performance and demand trends
The council members highlighted that Sarawak’s property market in 2024 has shown steady growth, outpacing the years before the pandemic.
After the COVID-19 downturn, the market rebounded strongly, surpassing even pre-pandemic levels.
In 2023 and 2024, residential property transactions exceeded 10,000 units, a notable increase from the pre-pandemic average of around 9,000.
“The property market has been performing well. We exceeded the 10,000 transaction benchmark, which shows strong demand,” they said, adding that Kuching remains the epicentre, accounting for nearly 50 per cent of Sarawak’s market share.
Miri follows as the second-highest in transaction volume, while Bintulu and Sibu maintain stable demand.
“Most of the population is concentrated in Kuching, which naturally makes it the most active market, followed by Miri,” they said.
Housing affordability and development costs
Affordability remains a key concern in Sarawak’s housing market.
The council members noted a surge in demand for high-rise properties, which, despite the ongoing preference for landed homes, have become more accessible due to rising land costs and the challenges of securing down payments.
Strata properties are increasingly seen as viable alternatives.
“Many younger buyers want convenience. They are busy with work and prefer homes that require minimal maintenance. Similarly, some older buyers opt for high-rise living due to better security,” they added.
The council members also highlighted that rising costs are driven by factors such as land prices, regulatory levies, and the legalisation of foreign workers.
“Compliance costs, such as the levy on converting native land to mixed-zone land, are incredibly high. These costs make it difficult to keep housing affordable,” they said.
Moreover, labour shortages pose another challenge.
Despite the introduction of the KETEKSAJA system, which streamlines foreign worker applications, extended processing times and additional fees continue to drive up development costs.
“Bringing in workers is not easy. We have to go through multiple steps, pay legalisation fees and meet stricter requirements,” they said.
Regulatory challenges and potential solutions
The council members pointed out that regulatory compliance and extended approval timelines further inflate development costs.
In Sarawak, obtaining development approvals can take up to three years, a significant contrast to the one-year average in Peninsular Malaysia.
These delays result in increased holding costs, which are eventually passed on to buyers.
“Time means money. If it takes three years to approve a project, developers bear extra costs, which will eventually be passed on to buyers,” they said.
To improve efficiency, SHEDA council members are advocating for improvements in government approval processes, particularly the extended time required to obtain occupation permits.
Unlike other states where consultants handle this process, Sarawak’s local authorities oversee it, contributing to delays.
“In other states, occupation permits are handled by certified consultants, making the process much faster. In Sarawak, it’s still under local authorities, which delays approvals,” they said.
The council members suggested outsourcing some approval processes to private consultants to expedite timelines and reduce costs, which could ultimately lower the price of homes.
“If we can shorten approval times from three years to one year, it will significantly reduce development costs and make homes more affordable,” they said.
Green and sustainable housing initiatives
As Sarawak moves toward a greener economy, the property sector is adapting.
On February 24, SHEDA signed Memorandums of Understanding (MOUs) with two leading green certification bodies, GreenRE Sdn Bhd and Greenbuildingindex Sdn Bhd, to encourage more developers to adopt sustainable practices.
“The government is pushing for green-certified projects. The signing of these MoUs encourages more developers in Sarawak to integrate green principles into their projects,” they said.
While sustainable construction practices are now seen as a necessity — particularly as financial institutions prioritise eco-friendly projects — the council members noted that these technologies come at a cost, which will affect property prices.
“Implementing green technologies comes at a cost, and that cost will inevitably impact property prices,” they acknowledged.
Future market opportunities and growth projections
Despite the challenges, the SHEDA council members remain optimistic about the future of Sarawak’s property market.
They noted that significant government investment in infrastructure projects, including the Autonomous Rapid Transit (ART) system and Sarawak’s
new international airport, is expected to stimulate property development.
“With all these infrastructure projects, foreign investors and workers will come in, creating more demand for housing. This will benefit the real estate market significantly,” they said.
The council members also pointed out that land prices near the ART route and new airport site have already begun to rise, signalling strong future development potential.
“Demand for land near the ART route and the new airport site has surged in recent months, leading to a sharp rise in prices,” they said.
Finally, the council members emphasised Sarawak’s growing economy, which has seen its GDP double in the past eight years.
Historically, property prices in Sarawak double every eight to ten years, and if this trend continues, investors in the market today can expect strong returns.
