News & Articles Singaporeans no longer attracted to Johor properties
Singaporeans no longer attracted to Johor properties
24 May 2015
The red-hot demand for properties in Johor seems to be cooling fast for Singaporeans ever since the minimum price threshold was raised to RM1 million from March 2014.
Singaporean property commentator Aaron Loy, whose peeve was published at The Online Citizen, noted that the minimum property price means such developments “are not made to be affordable for the locals. They’re there to maximise profits from foreigners (read: Singaporeans) with cash to spare”.
While this may not be a major factor yet for those who still consider such prices to be “cheap”, Loy said such thinking may be wrong as it does not consider longer term issues like who the property can later be sold to.
“Unless the government lowers the limit or there’s a miracle spike in property prices, the limit effectively eliminates all foreigners as potential buyers for your property. So, how can you sell.. when there are no buyers?”
This sentiment was echoed by UK’s Financial Times, which reported: “The idea that the Malaysian developments in Iskandar would satisfy a huge demand for a Singaporean overspill is being tested to its limits.”
It reported that Monetary Authority of Singapore board member warned residential developers, especially those from China, have built too many condominiums too quickly, stoking fears of a glut.
Wong had reportedly said there were 336,000 private residential units in the pipeline in the Iskandar development zone . “This, he said, was more than the total number of private homes in Singapore and would depress prices.”
FT also cited sales problems at Country Garden, a giant property developer from China that’s building 45 condominium towers offering a total of 9,500 units on the Danga Bay waterfront overlooking Singapore, to be completed by 2017.
The number booked or sold has stalled at around two-thirds since October 2013, when construction began.
Another Chinese developer, Guangzhou R&F Properties, has sold only about half of the 1,400 units in the first phase of its Iskandar development. Greenland Group, another Chinese developer, has a further 2,000 units coming on stream, adding to market pressures.
As to the prospect of Singaporeans and many working there want to live in Johor, Loy asked: “How many are willing to spend the extra time, at least twice a day, five times a week, enduring traffic jams going to and fro work via the check points?”
This factor, said Lot, means the potential for rental income remains low and as an indicator, he asked would-be property buyers to consider patronage at Johor businesses: “Are customers mostly locals or Singaporeans who visit Malaysia during the weekends?
From what I see so far, demand from local business staff is extremely low. So, who’s going to rent your property?
In my opinion, Iskandar Malaysia is, especially residential projects, in effect, is like Batam Island, in that they’re made to cater to Singaporean cash cows who are willing to be milked. In other words, most of it is hype, with inflated prices and an excess of fake demand.”
Singaporean property commentator Aaron Loy, whose peeve was published at The Online Citizen, noted that the minimum property price means such developments “are not made to be affordable for the locals. They’re there to maximise profits from foreigners (read: Singaporeans) with cash to spare”.
While this may not be a major factor yet for those who still consider such prices to be “cheap”, Loy said such thinking may be wrong as it does not consider longer term issues like who the property can later be sold to.
“Unless the government lowers the limit or there’s a miracle spike in property prices, the limit effectively eliminates all foreigners as potential buyers for your property. So, how can you sell.. when there are no buyers?”
This sentiment was echoed by UK’s Financial Times, which reported: “The idea that the Malaysian developments in Iskandar would satisfy a huge demand for a Singaporean overspill is being tested to its limits.”
It reported that Monetary Authority of Singapore board member warned residential developers, especially those from China, have built too many condominiums too quickly, stoking fears of a glut.
Wong had reportedly said there were 336,000 private residential units in the pipeline in the Iskandar development zone . “This, he said, was more than the total number of private homes in Singapore and would depress prices.”
FT also cited sales problems at Country Garden, a giant property developer from China that’s building 45 condominium towers offering a total of 9,500 units on the Danga Bay waterfront overlooking Singapore, to be completed by 2017.
The number booked or sold has stalled at around two-thirds since October 2013, when construction began.
Another Chinese developer, Guangzhou R&F Properties, has sold only about half of the 1,400 units in the first phase of its Iskandar development. Greenland Group, another Chinese developer, has a further 2,000 units coming on stream, adding to market pressures.
As to the prospect of Singaporeans and many working there want to live in Johor, Loy asked: “How many are willing to spend the extra time, at least twice a day, five times a week, enduring traffic jams going to and fro work via the check points?”
This factor, said Lot, means the potential for rental income remains low and as an indicator, he asked would-be property buyers to consider patronage at Johor businesses: “Are customers mostly locals or Singaporeans who visit Malaysia during the weekends?
From what I see so far, demand from local business staff is extremely low. So, who’s going to rent your property?
In my opinion, Iskandar Malaysia is, especially residential projects, in effect, is like Batam Island, in that they’re made to cater to Singaporean cash cows who are willing to be milked. In other words, most of it is hype, with inflated prices and an excess of fake demand.”
Source: The Rakyat Post