Every time people ask me if Iskandar’s in trouble due to oversupply, my reply is the same. It depends on whether the oversupply is going to crash the market or is the demand growing at the same time as well. These are two very different things yeah. Oversupply does not automatically lead to property bubble or crash unless the demand is not growing. We do not need to look too far, really. The oversupply situation in Malaysia did not suddenly happen just two weeks ago. There has been many numbers published about overhang units for at least a few years. If the oversupply immediately leads to property price crashing, then it should have happened earlier or possibly few months more? At the very same time, people without a home kept trying to tell people that they could NOT get a home of their choice, yet. If we need a home, just save money for one. I disagree with too many of these zero down-payment schemes because these may really crash the market.
Anyway, coming back to Iskandar. Two articles appeared alongside one another a few days ago. One talks about the potential of Iskandar. This sort of validated my answers to everyone that if the demand continues to grow, we should be doing just fine. Here’s that full article in TheStar. Star Media Group Bhd managing director and chief executive officer Datuk Seri Wong Chun Wai shared, “The influx of domestic and foreign investors will drive property demand here, especially in Iskandar Malaysia.” He added that Singapore is a great neighbour to have as this is also an attraction to some investors too. (Perhaps something like Hong Kong and Shen Zhen?) He also spoke about how the journey between KL – JB would be reduced to just 90 minutes when the HSR starts. (Breakfast in KL, lunch in JB and dinner in KL, anyone?) He believe Johor would become the next Klang Valley, with Johor Baru emerging as the second Kuala Lumpur. (Yes, I believe the same too though timeline wise, may not happen within the next few years yet) Full article here.
Second article also related to what I spoke about in my first paragraph. There are demands but the homes are just too expensive. This is despite the fact that Johor is said to have a huge oversupply of homes. This is the article in TheStar which is a reminder from Johor Ruler Sultan Ibrahim Ibni Almarhum Sultan Iskandar. He wanted the government to work with developers so that the Johor people have a home of their own. Sultan Ibhrahim said, “The current house prices are way too high for most people. They simply cannot afford to buy them … they can only afford to look at them.” (Humour aside, this situation is real and I reprimanded a good friend just days ago when he spoke about a new programme which was aimed at first-time home buyers. He asked if he could apply eventhough he has already a few properties!) Sultan Ibrahim added that there must also be some flexibility because a “one size fits all” housing policy would not do, as each state is different. (VERY TRUE! That’s why oversupply in some states are actually more serious even if the number of oversupply may be smaller simply because there were less developers building them…) This it the full article again.
Well, these two articles sort of also validated my two points above. Oversupply does not automatically lead to a property market crash plus demand is real and it’s there. However, the type of homes these demands are demanding are really not forthcoming yet. Well, adjustments are being made now even by the developers. So, hopefully more of these units are upcoming instead of just the ever taller majestic condo towers with 100 facilities for example. Just a humour. Not referring to any particular condo in particular yeah. Happy buying your first-home. Plenty of info in kopiandproperty.com too. Just sign up for a daily article yeah.
written on 26 Nov 2017
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