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Is Iskandar getting better? Or worse? Media reports.

I have been to Johor Bahru twice within the past 3 months. I think I could see positive developments and certainly constructions are happening in many places that I go to, including even the city centre. The two malls that I dropped by was full of people. I visited City Square and KSL Mall. In fact the stall owners in KSL mall was asking if I am a Singaporean. I said, NO in Mandarin. During the drive from the airport to the city centre, I was pointing to my colleagues of those developments in Senai which were only starting 4 years ago and is now completed or completing. Generally, I was positive even if my Johorean colleagues are saying that many newly completed developments seem to be empty. They have read about the oversupply in the news and as usual, none of them have bought a second property after the one they were currently staying in. Well, perhaps the media has had its effects, be they good or bad. Earlier, there’s one article from Bloomberg about Iskandar. Here: That Scary article about US$100 billion Chinese investment in Iskandar

There’s now another article which I think sheds a bit more light about Iskandar. This is the title of the article in StraitsTimes.com “Concerns prevail, but Iskandar slowly taking shape” Do read the article in full if you like to read something positive about Iskandar. Else, some briefs here. It basically says that the concern of oversupply is still there but there has been positive developments. It quoted many people who are happy with their lives in Iskandar. From working professionals to international student in Marlborough College. Statistically, it shared the following which it said was provided by the Iskandar Regional Development Authority (IRDA). Current population has reached 1.8 million. Back in 2015,it was 1.4 million. (400k up within 2 years is very healthy.) Investments wise, Iskandar has received RM222.4 billion as of December 31 2016 and this has exceeded its initial target of RM149 billion. IRDA shared that some 702,000 jobs have been created and 15 per cent of the jobs involve skilled workers.

After reading something positive, there’s another one which seems negative. Haha. Yes, this is the latest article in TheEdge Markets.com In brief, the article shared that due to the tightening of Capital outflows has affected Iskandar’s property market. It quoted Professor Zhang Zun, dean of the economis faculty in Fudan Univeristy who said, “I maintain my view that the Chinese government will continue its stringent policy in these few years. Capital outflows have fallen recently, but that was mainly due to the government stepping up capital control. Besides, the renminbi is still under pressure.” (I think he can also include the recent downgrade of China’s sovereign rating by Moody’s.) Here: Bad news? China’s credit rating cut because of ‘slowdown’ in economy Reading the article,does it mean that people with properties should just hold it for a few years and ride off the slow times? Happy following.

written on 26 May 2017

Next suggested article: Mid-priced landed properties in Klang Valley and Johor – RM600k to RM800k

 

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6 Comments

  • Wk on May 26, 2017

    the number of skilled professional and international students in Iskandar is likely to be one quarter or one tenth of Klang Valley so i do not believe these are the drivers for the slowly-developed boom that the article talks about. In fact, the empty residential units in Iskandar are expected to be scarily high for the next 5 year and those units are way above affordable level. I think most condo investors in Iskandar in the past three year will be losing money now or in the near future as the whole area does not have solid business and industrial base the Iskandar Development Corridor has been ongoing for more than ten year. The only small bright spot is the strong tourism inflow in recent years that is benefiting some retail businesses there due to sharp depreciation of ringgit.

    I may be totally wrong that Iskandar Development is quite “hollow”. I am very happy to listen to alternative views. I truly wish JB (the 2nd largest city in Malaysia) and Iskandar can achieve success sooner. Thanks.

    • charles on May 26, 2017

      Thanks WK. My personal view is that Iskandar is benefitting because it’s nrxt to SG as well. Based on SG, to grow further, it needs to rely on Iskandar too. SG cannot only concebtrate on financial services. There are lots of other things n Iskandar provides a good output centre to serve the region and the world. Just like you, i also wish JB all the best.

  • treychong on May 26, 2017

    Despite foreign investment or partnership projects, we should look at it as good opportunity for Malaysians. They will safeguard the job opportunity in Johor and also putting heavy investment to improve the local skill. The world is flat, anyway.
    TC, co-founder of https://room.asia

    • charles on May 26, 2017

      Thanks Trey. Nice site you hhave there.

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