Oversupply need not be all bad lah.

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This is something we read everyday. The number of unsold properties seem to be very high. In fact there are always articles quoting some experts which kept telling us about the oversupply situation in Iskandar and that new developments should be stopped. Some say stop for now. For now means for how long? 6 months? 12 months? Who can decide? Seriously, the right solution should be on how to increase the demand FASTER and not to SLOW DOWN the development. Perhaps change the composition of homes being built. Cheaper options please and not jist high end ones. Perhaps more constructively, think how to attract and expedite the approvals for more manufacturing plants. More REAL international schools with huge fields because the demand is still huge. As for Iskandar, a rail transit system would immediately boost demand. It will not be just the Malaysians lah. Think really rationally. In a recent conversation with many senior managers including my own boss, I had to step in and tell them the same thing. Focus on the demand, not the supply.

Secondly, assuming it’s now UNDERSUPPLY. If I am a high-end manufacturer and assuming approval for my plant can be done in weeks and my plant can be up and running within 24 months, where do you think my hundreds of workers will stay? At inflated priced rooms and having to share rooms since there’s just not enough supply of rooms? I still remember the time when there were suddenly a boom in number of students in Subang Jaya and there were shortage of rooms. I was staying in a ‘newly built’ small room shared by three and each of us were charged RM250. (Mind you, that was like over 20 years ago!)  Or perhaps I tell my staffs to stay further away from the working place? Seriously, they will not join me lah. Talents need homes and without ready choices of homes, don’t talk about attracting talents.

The above is just about a manufacturer. What about those theme parks in Iskandar? What about those international schools in Iskandar? What about the tertiary institutions? What about all those health tourism based attractions in Iskandar? What about those new malls and upcoming ones? Perhaps someone would now say, just build more hotels. Haha. I think we are forgetting the fact that the people working in all these places need a place to stay? As for the thought of just China, China, China all the time, do drive around a bit. I think we have forgotten that there are MANY Malaysian developers within Iskandar too. I can safely say that there’s no way that 90 percent of their buyers (Malaysian developers) are from China because if I am a buyer from China, I would prefer to buy from a developer I am familiar with first and not some Malaysian developers whom I am not familiar with. I used to meet developers in Iskandar nearly on a weekly basis a few years ago. They are still there today…

Just a reminder to the property experts. The development of Iskandar is not just about the number of homes being built. In fact, if it’s only about the number of properties being built, then Iskandar will fail. It’s as simple as that. How can it even compete with Greater KL if it’s just about building ever more homes? Focus on providing more solutions about how to increase the demand side of the equation. Focus on pressuring the authorities to be more pro-active in ensuring developments that will make Iskandar a better place to work, live and play. Unfortunately, I am not a well known property expert and I am also not a mass media. Oh yeah, I do not even own a unit in Iskandar. However, I think the right focus would ensure Iskandar succeeds. It’s to the nation’s benefit and not just some individuals. Happy following.

written on 9 July 2017

Next suggested article: Iskandar: Let’s quickly have a working BRT then, shall we?

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