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21% discount for properties in Iskandar? Or higher?

Posted in Iskandar / JB Property

While I have heard of discounts by some developers, especially those who priced their properties way too high but this is the first time I read about a 21% discount reported in The Star today (30th Aug). It read, ‘Country Garden hasn’t raised its maximum discounts beyond 21% since launch day’. It said that if the slowdown in Iskandar continues, the discount may have to be wider. UEM Sunrise Bhd is slashing its sales targets from RM3.2 Billion to RM2 Billion.  This is a huge drop of 62.5%. It said that this huge reduction is due to the weakness in the market. I think they needed to be reminded again, the right product mix sells better. Demand must not always be aimed at just the richer buyers of the foreigners. There are many older secondary landed properties in JB which is still below Rm300,000. The locals just may not stomach anything which is more than twice their usual understanding of property prices.

Another reason why I think the slowdown is happening is because way too many developers are launching way too many units at the same time. Besides that, Singapore’s own market is also slowing down. Read it here: Increasing stock, Increasing vacant units and HDB prices dropped 6 months consecutively. Be reminded, if Singapore’s own property market is under pressure, Singaporeans may think there’s a better opportunity at home instead of across the causeway which they have to face a 2 hour jam during holidays. Besides that, with better prices for the private homes in Singapore, many are also upgrading and thus had to sell off their HDB ad this will also give pressure to the prices for the HBD units. Besides that, for Malaysia, some investors are seeing more opportunities in  Greater KL too. Last year, I told my wife that I would like to buy in Iskandar before I buy another secondary property in KL. I now tell her that I would buy that secondary unit in KL first before Iskandar. Yes, I am still serious about Iskandar but I think there’s still time due to current ‘slow-pace’ situation.

The sentiment should recover slowly when the High Speed Rail has more concrete announcements. I asked my friend working in Singapore the other day. Tell me frankly, if the journey from Iskandar to Singapore is less than 45 minutes and the price of the condo with full facilities are cheaper than the typical HDB flats in Singapore, would he choose Iskandar instead. He said, he believe some of the middle income ones may be tempted if that’s really happening. I told him, when there are no choices, everyone would stick to what they think is good enough. However, with the right links, things will be different. When there are choices where the father can bring the baby daughter for a dip in the pool anytime he wants. A choice where those who are renting can now choose to use their S$900 rental for a RM500,000 condo instead and just need to wake up half an hour earlier. A choice where instead of the smallest room, they can now get married, have a family and stay in a full facility 1,000 sf condo, then it would be clear. Demand is there but perhaps currently we are looking at a breather.

Not everyone would agree, definitely. However, always remember that for the first few years of Iskandar, majority of everyone did not believe.  Today, just look at the number of visitors to LEGO world. Look at the cars parked at JPO during the weekends. Try finding a car park space in JB city during holidays. Oh yeah, someone said VEP will cause everything to stop. No comments, I will stop here. if you think VEP will stop everything, that’s your opinion and you are entitled to it. 🙂

written on 30 Aug 2014

Next suggested article: Linking KL, Iskandar, Malaysia – Singapore by High Speed Rail (HSR) and Rail Transit System (RTS)

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9 Comments

  1. Victor Tan
    Victor Tan

    The VEP will not stop Iskandar. A comment like that lacks maturity. Nonetheless without a penny of doubt, it will make Iskandar more challenging to realize and clearly it is.

    The developers launching way too many units at the same time? This over supply has been obvious for a long time hence the govt must perpetuate the demand if they are not keen to regulate the supply with a stronger hand. Nonetheless, this is the Malaysia government. Too lazy to regulate and to keen to make sure that their pockets get lined with benefits while screwing their stakeholders over.

    August 30, 2014
    |Reply
    • Noted Victor. Thanks. A comment on my govt is also not appreciated. How I hate/like my govt is up to me. There are lots of opinions about Singapore govt too. But as I m just a Malaysian, I keep it only to me. Of course I believe everyone is entitled to say what they want. So I will approve as long as it does not contain four letter word. Cheers.

      August 30, 2014
      |Reply
      • Victor Tan
        Victor Tan

        For your information I am Malaysian and from what I understand many Malaysians share my sentiment. My critique comes purely from the observation of results. Yes the Singapore government is far from perfect but they are brilliantly good. I have seen for the last 20 years how Singapore has been moulded and reinvented. It is where it is today not because of luck or resources, it is purely because the government has been responsible and forward thinking.

        August 30, 2014
      • Ok. Thks. If u insist.

        August 30, 2014
  2. Sim Teong Chuan
    Sim Teong Chuan

    Thanks for sharing your knowledge! I like your blog very much!

    August 30, 2014
    |Reply
    • Thk u for the encouragement. Take care n enjoy your weekend.

      August 30, 2014
      |Reply
  3. asali
    asali

    It will be good and succeed if the journey from JB to SG is less than 45 minutes or more and less.

    September 1, 2014
    |Reply
    • Kevin Kit
      Kevin Kit

      Agreed. 45mins in too underrated. I travel everyday using second link . Average travelling time is 1 and 1/2 hour to reach office (Tuas area) in order not to be late.

      October 15, 2014
      |Reply

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