Johor Bahru Property Market

Highlights

  • With the continuous growth in local and foreign investment, Iskandar Malaysia is on track to achieve its target, notwithstanding the general slowdown in the upcoming residential development projects and their take-up rates over the past one year.
  • The ‘Singapore’ factor remains a strong supportive pillar to the overall structure of the region’s economy and property development.
  • The property market of Johor Bahru  keeps a meticulously optimistic outlook because the country helps itself for the issue of GST execution.

Market Highlights

Iskandar Malaysia continues to attract investments, both local and foreign. As of October 2014, the cumulative committed investment to the region stands at RM156.35 billion. In terms of foreign investment which accounts for approximately 37% of the total investments, Singapore topped the list with about RM12 billion, followed by the US, Spain, Japan and China. To- date, RM77.17 billion or about 49% of the total investments have been realised.

Residential

There were several launches in the second half of 2014, comprising mainly high-rise residential developments. Some of the notable developments are as follows:

G Residences, on a 2.72-acre freehold site by GSB Group, consists of two 25-storey towers with 240 units of serviced apartments each. The project which has a GDV of RM233 million is situated in Plentong. The size of the property from 653  – 1,552 sq ft, the price is from RM327.000 onwards.

The effects of the cooling measures implemented earlier this year are being felt in the residential property sector with some developers shying away from or putting on hold their proposals to develop, especially the high-rise stratified units, due to anticipated slower take-up. However, certain developments in good locations, particularly those with sea views or facing the waterfront are still going ahead with their launches.

Johor Bahru Property Outlook

During the review period, absorption rate had been clearly more slowly, mainly in the primary market influenced by the cooling measures effective January this year. Although the residential sector continues to be the leading sub-sector in terms of transaction volume, launches of other property types such as office suites and industrial products by reputable developers have received good response with encouraging sales rates.

Despite the negative sentiments reported in both the local and Singapore media, the desire of Singaporeans to acquire homes in Iskandar Malaysia remains strong. The country is also in need to expand its manufacturing and productive sectors and Iskandar Malaysia appears to be the right choice due to its proximity, lower cost and business friendly environment. The impending construction of the HSR and the RTS will further enhance and improve connectivity between the two neighbours and this augurs well for the future growth of Iskandar Malaysia.

Going forward, the outlook for the the property market of Johor Bahru stays very carefully optimistic. The effect from the latest GST to be carried out in 1H2015 and the increase in toll rates on both sides of the causeway are being felt on all fronts of businesses.