Just few days ago, another friend pointed out again that Iskandar would face oversupply of condos due to the huge China developers who are building thousands and thousands of units there. I reiterate my personal views that oversupply in the short term may happen but as long as every of the planned investments happen and the HSR really starts next year, then a lot of these may change. Always be reminded that if the journey is really less than half an hour even during jams etc, the demand would increase a few folds because a condo with full facilities in Iskandar is still at least 2 times cheaper than a HDB flat in Singapore. Please also note that there are many Malaysians working in Singapore staying in the small rooms in HDB flats and paying a minimum of S$700 for them today. The reason why they are willing to stay there is because it takes hours to travel during jams.
Then, I read a piece of news from TMI. It gave me a pleasant surprise. I think it has given many people a surprise too after the many reports about China developers buying lands in Iskandar as if they were the only ones investing there. The title of this article says it all. The top 5 largest investors in Iskandar are Singapore, United States, Spain, Japan, Netherlands. The 6th would be China followed by United Arab Emirates, Australia, lebanon and France. Second question. Spain? What is it doing there? It is starting a steel plant; Acerinox. For Q2 2014, Iskandar Malaysia secured RM9.72 billion in new investments and this brought the total new investments to RM14.56 billion. The sectors contributing to these new investments include creative, healthcare, financial services and logistics sectors.
Personally, I would still prefer to buy my next property in KL because I still feel KL has better rental yield (even if low or none) and continuous potential capital appreciation due to urbanisation. Greater KL would have a few million additional populations by 2020. Thus, to me, Greater KL carries more value for me versus Iskandar. In terms of potential capital appreciation, it is harder to say. In a few years time, if everything which is supposed to happen falls into place, then I think Iskandar has the edge by the virtue of it being right next to the most expensive city in the world for 2013. Most importantly, buy only after you have considered and read enough. There are still lots of potential traps whether KL or Iskandar if you simply buy.
written on 1 August 2014
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