After Sabah quake, should Malaysian property investors rethink risk?

KUALA LUMPUR – When Ms Mastura Malak bought her first home in Kajang, on the outskirts of Kuala Lumpur, in 2018, she thought about location, price and capital appreciation. Earthquake risk did not enter the equation.

The 37-year-old mother of three paid RM245,000 (S$79,600) for the property. Two years later, she added a condominium unit in the coastal resort town of Desaru, Johor, for RM400,000. Both have since appreciated. For her, like many Malaysians, property is a means to long-term financial security – not a seismic gamble.

Then, just before 1am on Feb 23, 2026, the ground shifted.

A

6.8-magnitude

earthquake

struck off Sabah,

sending tremors

as far as Peninsular Malaysia and Singapore. There was no tsunami warning, no major structural damage and no reported casualties. The shaking lasted only seconds.

But Malaysia is a country where homes are often a family’s largest investment – a wealth-building tool, a retirement buffer, an inheritance asset. Seismic risk has rarely featured in buying decisions.

The Feb 23 tremor in Sabah has changed that calculus, at least for some property buyers, and prompted an uncomfortable question: What happens to property values and buyer confidence if a stronger quake strikes closer to urban centres?

The ‘safe’ neighbour near the Ring of Fire

Malaysia has millions of residential properties nationwide, with dense urban clusters in Greater Kuala Lumpur, Penang and Johor. In such a landscape, even a low-probability risk can carry significant financial consequences.

Malaysia is not considered a high-risk earthquake country.

Experts note that while Malaysia has been viewed as a seismic safe haven, as it lies outside the highly active and dangerous Pacific Ring of Fire, the tectonic belt responsible for most of the world’s major earthquakes, that does not mean total immunity. A 2021 study recorded at least 59 earthquakes in Peninsular Malaysia over the past century.

“If a significant earthquake were to occur in the area where I own property, it would definitely affect its value and resale demand,” Ms Mastura told The Straits Times.

“I think buyers would become more cautious, and so would I.”

In Japan, where earthquakes are frequent and often powerful, property is typically viewed first as shelter rather than a guaranteed appreciating asset.

Strict seismic standards are embedded into design, and buyers factor earthquake risk into expectations of value and depreciation.

Malaysia’s property market has evolved differently. The difference in mindset matters.

Ms Rodziah Manan, 40, who owns two properties, a house and a condominium unit, approaches property like most Malaysians – an investment to grow wealth and an asset to pass on to the next generation.

“I don’t really think about earthquake risk when buying property,” she told ST.

“I look at location, price, access and future value first. Earthquake risk feels very distant in Malaysia compared with flood risk.”

Floods are visible and seasonal. Fault lines are not.

Yet perception can move markets quickly. Ms Rodziah expects financial institutions to react if risks become more “real”.

Insurance premiums could rise. Banks could tighten loan approvals in higher-risk zones, she said.

Ms Mastura also realised she had never checked whether her insurance covered earthquake damage, a common oversight in a country where such events are rare.

In Malaysia, standard fire insurance does not automatically cover earthquake damage. The General Insurance Association of Malaysia says home owners may need additional coverage under house owner or householder policies, as many assume fire insurance protects against all major risks, which is not necessarily the case.

Seismic science and shallow risks

Professor Felix Tongkul, research fellow at the Natural Disaster Research Centre of Universiti Malaysia Sabah, said Sabah remains the country’s most seismically active region.

The Feb 23 quake occurred at a depth of 678km. Most earthquakes recorded in Malaysia are shallow, at less than 50km below the earth’s surface, according to MetMalaysia, the country’s official agency for weather and earthquake monitoring.

Magnitude alone does not determine impact. Depth matters.

A shallow earthquake of similar size, closer to populated areas, would likely produce stronger ground shaking and greater structural damage, Dr Tongkul said. 

“Unprotected old buildings will be at risk if the magnitude of a shallow earthquake reaches up to 6,” he added.

Dr Mazlan Madon, a fellow of the Academy of Sciences Malaysia, said earthquakes remain difficult to forecast.

“It is hard to predict,” he said, adding that preparedness is crucial while scientists continue studying seismic patterns.

Malaysia has seen this before.

On June 5, 2015, a

6-magnitude earthquake struck Ranau

in Sabah, at a depth of 20km, near Mount Kinabalu. It triggered landslides and damaged buildings because it was shallow and on land. Eighteen people were killed – including seven students and two teachers on a school expedition from Singapore attempting to scale the East Malaysian state’s highest peak.

More recently,

a tremor in Segamat, Johor,

rattled buildings and prompted inspections of public facilities. It caused no major damage, but it showed that seismic activity is not confined to Sabah.

Between 2016 and 2020, the Minerals and Geoscience Department mapped 11 active fault zones nationwide. Six are in Peninsular Malaysia, while Sabah has four and Sarawak one. Monitoring stations have been installed and coverage is being expanded.

After Ranau, Malaysia tightened its building rules.

Works Minister Alexander Nanta Linggi told ST the tragedy led to the adoption of the Malaysian National Annex to Eurocode 8.

Eurocode 8 sets engineering standards to ensure buildings can absorb earthquake forces through proper strength, flexibility and reinforcement. Malaysia incorporated the standard into its Uniform Building By-Laws in 2021, making seismic design mandatory for new buildings in identified risk zones.

Not all parts of Malaysia fall within those higher-risk zones. But in areas that do, compliance is critical, Dr Tongkul said.

“It will be suicidal for developers not to follow Eurocode in high-risk areas,” he said.

There is no blanket requirement for older buildings to be retrofitted. Much of Malaysia’s housing stock predates those standards. Preparedness is also uneven, Dr Tongkul said.

“Most schools in high-risk areas such as Ranau and Lahad Datu have been trained on earthquake preparedness. Some government facilities such as hospitals have not been adequately trained.”

For Ms Mastura, the Feb 23 tremor has introduced a new line into what once felt like a simple equation.

“With recent discussions about active fault lines and geological reports, I have started to realise that seismic risk is something that should also be taken into account for the long term,” she said.