Navigating Sarawak’s condominium market

The Sarawak property landscape has been undergoing a significant structural transformation. Traditionally dominated by landed residential developments, Sarawak – particularly its capital, Kuching – is witnessing a dramatic pivot toward high-rise living.

This shift presents a paradoxical mixed picture for stakeholders. On one hand, it is a vibrant, evolving market with immense long-term potential, but on the other hand, it is grappling with the dual pressures of rising oversupply and a widening affordability gap.

To understand where the market is headed, one must analyse the demographic shifts, economic drivers and legislative safeguards currently in play. The increasing number of condominiums in Sarawak is not merely a trend but a reflection of changing lifestyles.

Two distinct demographic cohorts are driving this appetite. First, the younger generation, who are digitally savvy and career-oriented, is moving away from the upkeep requirements of traditional landed homes. For this group, the appeal lies in the lifestyle package that comes with modern strata living: 24-hour security, integrated gyms, swimming pools and proximity to their offices.

Conversely, the market is seeing a notable downsizing trend among the silver-haired demographic. Older homeowners, whose children have moved out, are increasingly trading large, maintenance-heavy landed properties for the convenience of compact, secure apartments. The lock-and-leave nature of condominiums offers a sense of safety and community that is often lacking in older suburban neighbourhoods, making high-rise living a pragmatic choice for retirees.

Economic tailwinds

From a macro perspective, Sarawak offers a unique blend of modern amenities, natural beauty, affordability, safety and cultural harmony. Kuching has been ranked among the top retirement destinations in the world by International Living magazine.

Moreover, its robust infrastructure roadmap provides a solid foundation for property value appreciation. The completion of the Pan Borneo Highway is a game-changer, improving connectivity between major hubs like Kuching, Sibu, Bintulu and Miri. Enhanced accessibility historically correlates with increased property demand and value.

Furthermore, government-led initiatives and the state’s focus on green energy and digital economy projects are attracting a new wave of professionals and expatriates.

This economic optimism has turned the condominium market into a magnet for investors. Many view these units as high-yield assets, particularly when positioned near commercial centres or universities.

The rise of short-term rental platforms like Airbnb has further incentivised investors to snap up units for the tourism and business-traveller segments.

The shadow of oversupply

Despite the optimism, the sheer volume of incoming supply has sparked a cautionary narrative among industry observers.

Kuching, in particular, is facing a substantial pipeline of new condominium projects.

This rapid expansion has led to concerns regarding a property overhang – a situation where units remain unsold long after completion.

The fear of a potential property bubble is not unfounded. When supply outstrips genuine demand, price stagnation or even depreciation can follow.

While developers continue to launch ambitious projects, the absorption rate is being closely watched.

Critics argue that unless the influx of new units is met with a corresponding increase in the resident population or foreign buyer interest, the market may face a painful correction.

The affordability paradox

Central to the sales performance of any real estate market is the relationship between property prices and local income levels. In Sarawak, this relationship is increasingly strained.

Property prices in prime Kuching locations are considered high relative to the average local salary, which tends to be much lower than Peninsular Malaysia’s.

This creates a barrier to entry for many genuine buyers.

While the sell-then-build system remains the standard in Sarawak, intended to keep housing prices somewhat regulated through progressive payments, its effectiveness in curbing escalating costs is a subject of debate.

Many young Sarawakians find themselves priced out of the mid-to-high-end condominium market. The market dynamics are further complicated by the tension between speculative investors and genuine home seekers.

High-rise developments often see a flurry of activity during launch phases, driven by investors buying on impulse or fear of missing out.

This speculative heat can artificially inflate prices, making it even harder for the average salary earner to compete.

However, the genuine buyer segment is more discerning. They are prioritising location, construction quality and the reputation of the developer over flashy marketing campaigns.

This has led to a fragmented market performance. Projects in strategic locations with realistic price points continue to sell well while overpriced developments in secondary locations struggle to move their inventory.

A bright spot in the high-rise sector is the niche demand generated by Sarawak’s status as a regional education and commercial hub. Apartments located near major institutions such as Swinburne University or Unimas have seen steady demand from parents buying for their children or investors looking to lease to students.

Similarly, the medical tourism and meetings, incentives, conferences and exhibitions sectors are creating a steady stream of occupants for short-term rental units, providing a buffer for owners in an otherwise crowded market.

Legislative safeguards

Recognising the risks associated with strata living such as neglected common areas or disputes over maintenance fees, Sarawak’s government has been working to fortify the legal framework. Unlike the Strata Management Act 2013 which governs properties in Peninsular Malaysia, the Strata Management Ordinance, 2019 (SMO 2019) is the cornerstone for Sarawak.

It provides a clear roadmap for the roles of developers, joint management bodies (JMBs) and management corporations.

Crucially, the establishment of the Strata Management Tribunal offers a specialised avenue for resolving disputes without the need for lengthy and expensive civil court battles. To further refine these rules, the Strata Management (Management and Maintenance) Directions 2024 were recently introduced.

These directions provide granular implementation details, ensuring that developers and JMBs maintain transparency in fund management and upkeep. For a buyer, this legislative maturity is a significant confidence booster, as it ensures that their investment will not deteriorate due to poor governance.

As it currently stands, the Sarawak condominium market in 2026 is at a crossroads.

The transition to high-rise living is inevitable and supported by strong demographic and economic fundamentals. However, the path forward is hampered by the realities of a high-price environment and a looming supply glut.

The mixed picture described by analysts suggests that success will not be universal.

Developments that offer genuine value, strategic locations and a commitment to long-term strata management will thrive. But those relying solely on speculative heat may find themselves contributing to the state’s property overhang.

The key to navigating the Sarawak high-rise market lies in looking beyond the brochures and understanding the delicate balance between the aspiration for modern living and the reality of economic affordability.