I do not really agree with some of the things the government is going to do for the people to own a home. If they do not qualify, there’s a reason why they did not qualify. Let’s not have some short-term measures, HELP some of these people who could not and should not be buying a property to buy a property. It’s not just making these people suffer in the longer term but it will also make the market very much more dangerous for everyone who managed to get their home loans approved earlier.
Article in edgeprop.my here. House Buyers’ Association (HBA) honorary secretary-general Datuk Chang Kim Loong said that the proposal to lower the threshold of foreign ownership of condominiums and apartments to RM600,000 may encourage developers to ignore building affordable homes but focusses on building luxury properties above RM600,000 instead.
He stressed, “Furthermore, the situation will be more acute in Johor as prices of properties in Singapore are very expensive and if the threshold is reduced to only RM600,000 as proposed, this is less than S$200,000 (after the currency conversion) and will definitely open the floodgates for foreigners especially based in Singapore to buy properties in Johor. The locals will be drowned with the influx of these Singapore based buyers.” It’s a long article. Read the Article in edgeprop.my here.
I seriously do think Chang has a good point yeah. RM600,000 is definitely a very low entry point when the Singaporeans are earning SGD which is 3 times higher than RM. However, I am not so sure if these foreigners would want to just buy and hold because if they were to buy and stay in JB, their lifestyle will have to change totally. Right now, they could rely on public transport in Singapore and thus they could manage their travel to work effectively.
As for why buy and hold, just need to look at the current rental for the high-rise in JB currently. It’s looking pretty good for the tenants at the moment. Not so good for the owners yeah. The monthly mortgage which owners are paying is not going to be anywhere near the potential rental they will be getting. I have many Singaporean friends. To them, it’s always about yields… Not many have told me that they love to buy and get a negative rental yield every month for many months to come.
If they (Singaporean buyers) move to JB which is not yet connected to Singapore via the Rail Transit System (RTS), they will have to wake up much earlier to go to work in Singapore. After work, they will have to wait until after peak periods to come back to their JB home. It’s going to be arriving late in the evening and waking up wee hours in the morning. I am just not sure how many Singaporeans are willing to do this yeah. I may be wrong okay. I am just a Malaysian.
Therefore, whether the foreign purchase would go up really depend a lot on the connectivity. In fact, if there’s connectivity, Malaysians who are working and currently renting a room in Singapore may also buy a home in JB. This is because even fellow Malaysians do not like to arrive late in the evening and wake up in the wee hours in the morning. Thus they are in Singapore during weekdays and they are already paying a room rental of SGD600 – 700 per month. If RTS is ready, it definitely makes sense for them to get a home and not stay in a small room everyday… Happy understanding.
Next suggested article: RTS JB – SG? Yes, still on. How?