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