Condo, the new boom in secondary towns?

I just came back from Sandakan after a week long CNY holiday there at my wife’s hometown. Just less than three years ago, I got to know about Sri Utama Condo project by IJM. If you have never heard of this project it is ok because the project is in Sandakan, Sabah. Of course I do not simply buy any condo but when my brother in law told me he booked a unit at just RM210k and the size was 1150sf, I told him I also want a unit. I failed to secure one and by the time the third block was launched, it was RM280k. Yesterday I visited my brother in law’s unit. The bumi allocated units had just been released. Pricing starts from RM380k onwards. Oops, I think I really did miss a good opportunity.

What are the key learnings? Well, if it is a proper condo in a good location by a reputable developer and it is below RM200psf, the answer is clear; buy one. It may or may not rise so high like this one but there is a limit to the overall production cost even if the land may have come cheap. There is another condo project coming up by IJM in Sandakan. It starts from RM280K onwards and today I visited the project. Well, most of the units were taken except for the Bumi units. This time, I do not feel bad. I really cannot afford it. I only have limited resources but unlimited wants.

In terms of opportunity, I think there are still a lot of opportunities in many secondary towns, not just in Sandakan. Reason being, most of these places have not seen a lot of such condo projects. The number of new units offered are still small compared to the total population and thus it would be easily absorbed by the current population as well as the sons and daughters who have gone to work in Penang, KL or Johor and is thus well aware of the new trends. In fact, some working in Singapore or Hong Kong may even opt to buy a bigger property so that their parents would be able to stay in somewhere more comfortable too.

written on 8 Jan 2014

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