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Increase of Vehicle Entry Permit and Iskandar property demand goes down?

Sorry. Please allow me to smile if not laugh. I seriously do not think this should ever be the reason why Singaporeans would stop buying a property in Iskandar. There are many other reasons, more valid ones but Vehicle Entry Permit? This was the same reasoning given to me when I decided to buy in Damansara Damai instead of the usual few prominent places like Bangsar, Mont Kiara, Cheras etc. Ok, perhaps the real reason I bought Damansara Damai was because I could not afford all these places mentioned. However, when they told me that I would have to pay RM1.60 toll per day to reach my home everyday. I told them that even if I pay RM3.20 everyday for one year, it would come up to just RM1,168. Considering I can stay there for 10 years, this would be an additional RM11,680 spread over 10 years. They wanted me to pay extra RM500,000 or more today to save RM11,680 over 10 years?

Coming back to the Vehicle Entry Permit (VEP). Assuming this is RM50 per day and assuming the Singaporean buyer comes into Malaysia every weekend in the whole year. This is an extra RM5,200. (RM50 x 2 days x 52 weekends).  If I am a Singaporean buyer who is buying a condo and I decided not to buy because of this RM5,200 perhaps it is best that we do not attract these buyers. Sorry but RM5,200 in Singapore dollar is only S$2,000 and this is spread over one whole year. The truth is, the savings that these buyers would get from having seafood meals with their family here in Malaysia, drive into Melaka for a much better food variety, drive into Ipoh for the best dim sum and dry curry mer and a cup of fresh white coffee would easily exceed the paltry VEP that is being proposed and is being debated currently.

Please do not jumble up two different matters. Whether or not Iskandar is worth investing and if yes, what to buy is a totally different topic from whether VEP would stop Singaporeans from buying Iskandar. The above does not even take into account the huge difference between a HDB flat with not even a car park versus a full facility condo which the Singaporean family can take full advantage of every weekend. It also does not take into account the usual capital appreciation of the said property. Assuming a RM500,000 property and the appreciation is only 1% per year, that is already RM5,000. Until today, I have not yet owned a property in Iskandar. However, it still does not stop me from smiling with the suggestion that with VEP, the demand for Iskandar properties may drop.

written on 31st July 2014

Next suggested article: Buying Iskandar? HSR update. ‘Malaysia-Singapore meets monthly.’

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23 Comments

  • Victor Tan on August 1, 2014

    You fail to consider that on top of the VEP, there is toll charges, there is an interest charge 4 times that of SG, a currency that is depreciating on average of 4% a year and property price that is comparable to KL but having an economy far far far behind (if not for Singapore).

    If the VEP was RM5 per day I am sure many Singaporeans would not mind either so your your Damansara Damai analogy is far from comparable. Tell me you would still consider it at RM20 everyday.

    We enjoy Malaysia ONLY because it is a cheaper alternative. Nonetheless, if cost was almost similar, Singapore is actually a much more brilliant country to stay.

    • chialih on August 1, 2014

      Hi Victor, thanks for your views. For your views, I can only say we can agree to disagree. Brilliant to stay in Singapore or in Malaysia depends on personal preference. For me, if I am a manager, I would choose Malaysia if the amount that I am earning in Malaysia and Singapore is the same number. While it may be more jammed in KL, but I would have many advantages. Perhaps if you are a Singaporean, then it may be a but more advantageous. I represent just myself in this view.

      • Victor Tan on August 1, 2014

        Of coz. It depends if space is a important factor that can trump security, children education, stable currency, lower cost of living (ignoring house and car), never a need to ration water, fair and equal rights and world class facilities. Btw…. General Managers in Malaysia barely even earns the level of a senior executive with 5 years exp and we pay half the income tax! sure sure… if the value of space is indeed so much more critical then malaysia would be the better choice.

      • chialih on August 2, 2014

        🙂 I think there are truths to what you say. Do not wish to comment on Singapore. I always think every country has its advantages. I think it is a decent country to live in without any doubt. As for the salary range, please do refer to the salary range reports which are available online, there’s no difference on average between a senior manager in Malaysia and in Singapore in number. Unless you are talking about currency exchange. In fact, a fresh engineer in Penang and a fresh engineer in Singapore earns almost the same. enjoy your weekend ahead.

      • Victor Tan on August 2, 2014

        ok. if number it is the same but value wise no different from countries that used to be behind Malaysia (e.g. Thailand and Indonesia). Malaysia is slowly falling behind its regional peers and as a guy who frequents most of these countries, I assure you such is the case.

        Anyway after taxes, number wise, Singaporeans do make more.

      • chialih on August 2, 2014

        Thanks Victor. I like Indonesia. I think they will be a superpower in future. I like Thailand. They have a good culture. I like Singapore. Everything is so clean, neat, systematic but I love Malaysia. I have not travelled a lot, only less than 20 countries thus far. In terms of Malaysia, I have only been long term in a few cities like Ipoh, Teluk Intan, Penang, KL and Johor plus I go Melaka, Sabah, Sarawak often too. Hope to travel more like you. No comments on the who makes more, after tax between SG and MY. If you really think so, sure. Everyone is entitled to what they believe.

      • Victor Tan on August 2, 2014

        A post I created in FB last year.
        ******
        Amazing… for the same income value, the personal tax in Singapore is less than RM1,400 while that in Malaysia is RM14,325. Even treating it dollar to dollar, the taxes at the same amount in local currency is SG5,650 vs RM14,325. How did Singapore come so far despite burdening the population so little?
        *****

      • chialih on August 2, 2014

        thanks Victor. all the best in SG.

      • Victor Tan on August 2, 2014

        You are welcome.

    • Jack on August 13, 2014

      It’s matter of time before they’ll take more drastic actions ,Many Malaysian have proposed it to their authority about It .Won’t be surprise ,if their next moves will be Malaysia Immigration Department is going to burst out,the Foreigners without Permanent Resident Status or Approved “Malaysia My Second Home program”
      Many living Malaysia for YEARS and by the illegal means of Social Visit without Permanent Resident Status or Approved “Malaysia My Second Home program”
      ———————————————————————————————————————————–
      Now want to blame Malaysia Government ? Singapore gov has been Discriminate Malaysian for Years.Lets look into the Facts ! Singapore current 65K for 10 years C.O.E ,Average Toyota car 1.6 cc Cost @$100K- S120K including 10 years COE
      How much Malaysian Pay V.E.P for his Malaysian Cars $35 x 5 days = $175 x 4 weeks = $700 x 12 months =$ 8,400 x 10 years = $84 K for COE only ,This NOT included ERP charges of $ 5 per day x 5 days = $25 x 4 weeks =$ 100 x 12 months =$1200 x 10 years =$12K .
      ——————————————————————————————————————-
      Malaysians PAYs C.O.E without CAR included = $84 K plus $12 k =$96 K 10 years for Journey J.B /Singapore of working hours 9/10 Hrs their Car being sitting in Car Park rather on Singapore road before returning home,after finishing their work of 9/10 hrs daily.
      Singaporean pay 10 YEARS C.O.E =PLUS FREE CAR of total $ 100 k,the usage 24/7 be on road.
      Now You see how Singapore Government discriminate & treats Malaysian?
      ——————————————————————————————————————-
      Singapore Exchange rate $100 =RM 256 .
      IF Singaporean fill their cars full tank in Singapore $ 100 $2.40 a litre …….. all Gone.
      So they come to JB ,Fill Up Ron 97 a very low,low tax ,RM 2.90 a litre for a total RM 100 Full tank ,Balance RM 156 , EVEN AFTER paying the suppose Malaysia implemented VEP of RM 50 ,Still with RM 106,Spending Dinner of 4 persons in the family of RM 50 ,Still have Balance RM 56 for Groceries of 7 days that stealing away the subsidy that means for Malaysian as Subsidise by Malaysian Gov, Sugar,Flour,Cooking oil ,Etc….
      If You see these Cheapo Singaporean pattern of Spending…..Better ask them to spend their Money in Singapore,rather jamming J.B custom and roads, YES you not Welcome in Malaysia……you make the Cost of Living very high to Johorean Higher.
      Why No VEP for BUSES and LORRY that enter Singapore ?Dont this big vehicle using much Big space on SG road than a car? Oh wait a minutes this only BENEFITS Singapore.This shows how smart can Malaysian Gov be by responding SG VEP increase with increasing 400% Toll first ,VEP later.As they already Expects to SG policy to match up.Then we will see Buses that ferry their workers and lorry for their Food will be more than RM 70 a trip when SG match up.
      MYGovt expects all this increase should be borne by Singapore business side,which that ends up to Singaporean.MY Gov even suggested & urges for SG business using Singapore Registered Buses and Lorry to come and collects their Workers and Goods in JB. So whatever the increase be for the future of Toll and VEP will be Not their problems anymore.
      MY has been calling MY workers to returned Home for years and get themself to be ready by 2018 for right Skills,Now Iskandar projects at East-Johor Pengerang is building Refinery,Power plant,Petrochemical, Harbour Ports,Oil Rig Yard,Shipyard Building,Dry Docks,Marina yard,.Same things with Huge projects happening at West-Johor of Tanjong Piai Iskandar projects that needs at least 300,000 /400,000 skills Malaysian workers.
      Malaysian PR working in Singapore using Singapore cars ,you better live in Singapore or You DESERVE paying more than the VEP RM 50 per day ,You Earn Singapore Dollars,work in Singapore and stay in J.B.
      YET YOU DON’T PAY MALAYSIA INCOME TAX ! Yet You the One BAD MOUTH about Malaysian Gov and being NO 1 PAP supporters as PRU 13 shown

  • daily Travellers on August 1, 2014

    Good point but then multiply that number by 3.5 for people who stay and commute daily.

    And add the daily toll fee of 30 ringgit plus another 30 ringgit for petrol and 3 hours of traveling time.

    Try smiling at that. If I am a Singaporean and I am who can afford a million ringgit to buy a property I might think twice of the time I need to spend the time commuting and the less significant saving now.

    • chialih on August 1, 2014

      Thanks for your views. Good to know that you are one of those who would think twice. May I know after thinking twice, what would be your final decision?

  • Victor Tan on August 2, 2014

    http://www.channelnewsasia.com/mobile/singapore/commuters-see-smooth/1293876.html

    let’s hope this is not the sign of things to come. this is just Malaysia increasing a road toll and there is still Singapore’s increase then the VEP. If i were a betting man, i would be shorting the JB economy right now.

    • chialih on August 2, 2014

      I also hope there’s a better solution to this. Does not give anyone any advantage if both sides are not talking and solving it together.

      • Victor Tan on August 3, 2014

        Some Singaporeans who headed into JB have found all the queues gone! hooray. but hope the businesses there remain sustainable. think once vep come in JB can chap lap liao.

      • Victor Tan on August 4, 2014

        http://news.sinchew.com.my/node/379670?tid=1#.U9-IDtk5ga0.facebook

        Essentially this article is a protest by the JB Small Business Association on the toll hike. They found business dropped at least 30% and for those that Singaporeans frequent, at least 50%. And this is less than S$6 increase in commuting cost.

        Anybody who tells me that JB will still thrive and Iskandar will continue being a success after the VEP is implemented will seriously need their heads checked.

    • Kj on August 4, 2014

      Spot on Victor. I would think 10 times again about Iskandar and Johor. What if they increased the toll again in the near future. I have never like tolls. There is a reason why people pay more for prime locations. So what if it is an extra rm500k but it is in Singapore and it’s nearer to all the amenities and it’s safer and cleaner and most importantly a proper government that is not flip flop like the one in Malaysia. I believe the rate of appreciation would be faster as well in 10 years time in Singapore.

      • Victor Tan on August 4, 2014

        thanx. it is really common sense but sad to say jealousy and envy often clouds such logic and instead of a win-win, they prefer a lose-lose position.

      • Kj on August 5, 2014

        If Singaporeans decides not to come over to JB . Our currency will depreciate further and certain quarters that relies heavily on foreign consumption such as hawkers will see a drop in business and profits. People would start losing their jobs because the demand for the service sector would drop and since JB is mainly a plantation state people might consider going back to tapping rubber trees and farming. Inflation will still be around because our currency would be smaller and materials will cost more for us as our purchasing power dwindles. Not to mention our GDP and capita per income is one of the lowest in South East Asia. Yeah whether we like it or not, without Singaporeans there won’t be a booming economy in JB.

  • Victor Tan on August 2, 2014

    http://www.channelnewsasia.com/mobile/singapore/commuters-see-smooth/1293876.html

    Hope this is not a sign of things to come. This is just Malaysia increasing toll then there i Singapore’s increase and then the VEP. If i were a betting man, I would be shorting the JB economy.

  • ND on August 8, 2014

    Having higher tolls and VEP is likely to improve demand for mid-high end housing in JB. This is bad for the lower income Malaysians staying in JB and working in SG though. This transport levy tilts the balance to the richer workers and property owners as the reduction of jam makes commuting more pleasant.

  • Furterers on August 9, 2014

    Singaporeans will still go into JB for food and shopping but possibly less frequently. But to buy a property there? Nah, I’ll skip. A few downsides. 1. Security. Even with security guards, how much are they paid? Can I trust them? 2. Commuting to Sg to work and back to JB. Even with current tolls, I’d be reluctant to spend so much time on the road. 3. For rental? Not much in JB. In sg, a 3 bedroom hdb can be rented for as much as sgd 2500. 4. MY’s flip flop policies on foreign ownership of property. Suka suka, later they tell you your lease only for 30 years. Also LL, nothing I can do.

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