Demand remains strong among local buyers with landed homes proving to be popular.
By Khalil Adis
Johor’s property market is finally seeing some signs of recovery, with majority of new launches (604 units) located within the state in the first quarter of 2022, data from the National Property and Information Centre (NAPIC) showed.
Of the total of 2,961 units launched across the state of Johor, Melaka, Selangor and Pahang, 164 units (5.6 per cent) were sold.
Majority of them (2,657 units or 90.5 per cent) were landed properties while the remaining 279 units (9.5 per cent) were high-rise apartments.
Landed homes proved to be popular across these states with 164 units sold (6.2 per cent) out of the 2,657 units launched.
What NAPIC’s data suggests
While NAPIC’s data did not give a breakdown of the nationalities of buyers, these landed homes are likely snapped up by local buyers.
Unfortunately, NAPIC’s data did not provide a breakdown of how many units were sold in Johor out of the 604 units launched.
Interestingly, majority of the launches (1,197 units or 40.8 per cent) were priced from RM300,001 to RM500,000.
This suggests that developers are targeting mass market local buyers in the low to medium price range.
Record HDB and private property prices in Singapore may have spurred buying activity
With majority of these launches located in the state of Johor, it is also likely developers are targeting Malaysians working in Singapore who prefer living in landed homes.
The city-state has seen record prices in both the HDB and private property markets as well as rental hikes.
Government data showed that the Housing and Development Board (HDB) Resale Price Index (RPI) and Urban Redevelopment Authority (URA) Private Property Index (PPI), as of the second quarter of 2022, are now at a record high.
For example, HDB’s RPI is now at 163.9 points which is an increase of 2.8 per cent over that in the first quarter of 2022.
Meanwhile, the PPI is also at a record high of 180.9 points whereby prices of private residential properties had increased by 3.5 per cent in the second quarter of 2022, compared with the 0.7 per cent increase in the previous quarter.
Rentals have also increased in both the public and private housing markets, government data showed.
These are among the push factors for Malaysians working in Singapore to look to buying or renting a property in Johor.
Lukewarm sentiment among Singaporean and foreign investors
Despite this, Singaporean and foreign investors are adopting a “wait-and-see” approach to Johor’s properties.
Currently, the minimum purchase price in the state of Johor for foreign purchasers are at RM1 million,
Of the 2,936 units launched, only 134 units (6.4 per cent) are priced at above RM1 million.
This suggests that demand from Singaporean and foreign investors has remained rather muted.
Some of the potential factors that may have deterred buying activity include the negative sentiments arising from the ongoing high profile corruptions cases involving Malaysian politicians, the severe oversupply of residential properties in Johor, crime and safety issues as well as the flip-flop in policies about the Malaysia My Second Home (MM2H) programme.
Data from NAPIC showed that Johor has the highest residential overhang in Malaysia with 5,992 unsold units followed by Penang (5,816 units) and Selangor (5,215 units).
Johor also has the highest serviced apartment overhang volume in Malaysia with 16,425 unsold units followed by Kuala Lumpur (4,459 units) and Selangor (2,337 units).
Since the full opening of borders between Singa[pore and Malaysia on 1 April 2022, Johor has seen traffic congestions at both the Woodlands custom, immigration and quarantine (CIQ) checkpoint and Tuas Second Link.
“We are seeing traffic jams across the causeway and the second link as well as long queues at the local eateries with more and more Singaporeans resuming their weekly visits to Johor and Malaysia. The Johor traffic to Singapore is almost back to normal,” economic affairs minister Mustapa Mohamed was reported as saying.
However, buying activity among Singaporean and foreign investors has yet to pick up.
Iskandar Malaysia continues to attract institutional investors
Despite this, institutional investors have continued to invest in Iskandar Malaysia.
Government data showed that Iskandar Malaysia has recorded committed investments of RM13.2 billion in the same period out of which RM5.9 billion have been realised.
“A total of more than RM10 billion will be generated by foreign investors in this region for the development of data centres,” Prime Minister Datuk Seri Ismail Sabri Yaakob said in a statement.
On July 25, the prime minister chaired the Iskandar Regional Development Authority (IRDA) meeting together with Johor's Chief Minister Datuk Onn Hafiz Ghazi.
“In total, more than 6,000 people in this region have received direct benefits from the socioeconomic initiatives that have been carried out,” he was reported as saying.
Upcoming projects may boost foreign investors’ confidence
With border restrictions now eased, two projects could bolster confidence in Johor’s property market.
They include the Johor Bahru – Singapore Rapid Transit System (RTS) Link and Coronation Square.
The RTS Link is a 4km cross-border railway shuttle project that will connect via a 25m-high bridge from Woodlands North Station (LRT) in Singapore to the Bukit Chagar Station in Johor Bahru.
When completed in 2026, it can serve up to 10,000 commuters during peak periods, for every hour and in each direction.
Meanwhile, Coronation Square which is located in the Ibrahim International Business District (IIBD) will be Johor’s equivalent to the KLCC.
When completed by 2028, it is expected to create some 60,000 jobs and contribute over RM9 billion to Johor’s economy.
An independent analysis from yours truly