Eventhough there are oversupply concerns, the property market in Johor remains positive. This is the comment from Malaysia Institute of Estate Agents (MIEA) Johor State branch chairman Vadeveloo Suppiah. In fact the cooling measures announced in Budget 2014 were effective in Johor and this is shown from the contraction of 1.6% quarter-on-quarter house price index. This is the first decline in 27 months and this, coupled with other state policies to address the oversupply has slowed down the market.
For example, the restriction of purchase for foreigners. Others include the foreign purchase consent fee, which is now 2% of purchase price instead of RM10,000 previously. Also, the additional 7.5% levy for release of bumiputra units and a minimum RM1 million floor price for foreigners except for projects with special approvals or those in Medini. This has affected the condominiums and serviced apartment market and has also helped to reduce the number of speculative buyers. In fact, many of the developers who were supposed to launch are actually scaling back and some of them are even changing their plans from services apartments and condominiums into townships and landed properties or even industrial parks instead. Many are now waiting for the market recovery.
Despite the oversupply concerns being lessened with some push back and scaling down, the property prices would still face the huge oncoming supply, especially from the China developers which are building new units in the thousands. They include Country Garden’s 9,500 units, R&F Properties’ 32,000 units over 10 to 15 years and The Greenland Group’s 2,200 units. What about the positive news for Johor? Well, total investments in Johor for 2014 is expected to exceed RM20 billion. Besides that, the total cumulative committed investments up till September 2014 is RM156 Billion with 50% already materialised. Besides that, demand is still strong from first time buyers, upgraders who live and work in Johor as well as Malaysians working in Singapore. Besides that, one can now see new attractions in the past few years or recently such as Legoland, Johor Premium Outlet and Pinewood Iskandar Malaysia Studios. Let’s not forget the huge Pengerang Integrated Petroleum Complex as well as Microsoft Corp’s data centre in Kulai Jaya too.
Majority of the questions or perceptions for Iskandar, from the beginning until today has always been more on the negative side. In fact, the Singaporeans were the most negative but today is the largest investors by country basis. I remember reading articles about a new ‘White Elephant’ in Iskandar. Until today, I still have friends who said, there’s nothing in Iskandar or even Johoreans who said, what’s in Iskandar? I continue to be positive about Iskandar but yes, I am worried with the current state of oversupply. The China developers were not something in my mind previously until many continued to snap up lands in Iskandar after Country Garden. So, yes, I agree that there is now oversupply. As for whether I would still buy there? Answer is Yes, if the right opportunity opens up.
written on 15 Nov 2014
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