Singaporean VS Iskandar

Why Singaporean Should Invest In Iskandar Malaysia

1) Too many cooling measures on the property market in Singapore have made it expensive and difficult to invest in Singaporean property. The various cooling measures with their own 3-4 letter acronyms like ABSD, SSD, TDSR plus financing limitations and other regulation on both public and private housing have turned away investors. Stamp duties in Singapore today can go up to 18% of the property price alone.

2) Singapore property prices are beyond their historical are beyond the price range of many: A couple 1 ‘ with SGD$100,000 savnn^s.have very few investment choices in today’s Singapore property market. Far out suburban locations like Pasir Ris, Woodlands, Jurong 11. and Choa Chu Rang are already touching I SGD900-l,000psf (RM2,300-2,600psf) whereas Iskandar Malaysia is in the range of SGD200-500psf (RM500-l,300psf). Singapore city center prices hover between SGD1,800 – 3,000psf (RM4,600-7,800psf) in comparison. It is important r to use Singapore as a comparison because Singapore is only 50km dway from Iskandar whereas Klang Valley is 350km away. There is a 5-7 million SGD earning population in Singapore versus the 8-12 million MYR earning population in Klang Valley. This I is why Singapore is a natural market for J[lskandar property.

3) Iskandar Malaysia property offer the benefit of being just next door, hence it is easier to touch and see what exactly you are buying (vs other overseas properties like Australia, London or Thailand).

4) Cultural similarities between Malaysia and Singapore (they were once a single country after all) make it easy for Singaporeans to understand the buying process in Malaysia. Note that both Malaysia and Singapore are former British colonies and share the same basic legal system. Many Malaysians live in Singapore, intermarried and many Singaporeans have Malaysian relatives.

5) InfrastructurfejWin place and catalytic projects are moving. With the completion of Goastal Highway, and Eastern Dispersal Link in late 2011,travelling within Iskandar has been made much easier. The opening of Legoland, Hello Kitty Theme Park and construction going on in Puteri Harbour, Medini with ongoing rejuvenation of JB city center have given much confidence to Singaporeans that things are moving and execution-ability is there.

6) Property price appreciation and early success stories by other investors who invested into Iskandar have spread around and given confidence to more investors to consider Iskandar. Stories of those who achieved 300% price appreciation in their properties are not uncommon and have led many to try to achieve the same returns moving forward.

7) More and more Singaporeans are beginning to consider Iskandar as an alternative place to live or retire. As costs spiral in Singapore, the balances in your Central Provident Funds (CPF) (the EPF equivalent in Singapore) are starting to look too little for comfort and with dividends growing at 1-2% p.a. it is not inspiring confidence that CPF will be enough for retirement. Iskandars lower cost of living, close distance to Singapore and much better quality offerings per dollar makes it an enticing option. A survey done by a property portal in early 2013 highlighted that as many as a third of Singapore based respondents were considering retirement in Malaysia.

8) The Mega Region Factor. Like how Shenzhen has complemented Hong Kong, the same is happening for Iskandar and Singapore. In its own subtle way, changes are happening like the improving transport links (High Speed Train 2020 & JB-SG Rail Link 2019),Capitaland (Singapore’s biggest and a government linked developer) developing an RM8billion township in Iskandar, Singapore Government allowing the use of Medisave (using CPF for medical purposes) in selected Malaysian Hospital,Economic Development Board dl (EDB) and Singapore Manufacturing Federation encouraging members to look at opening factories in Iskandar. This trend is very strong, obvious and is not reversible. The mainland Chinese have invested big into Iskandar with projects like Country Garden and land purchases by developers such as Guangzhou R&F and Macrolink Real Estate, all of which are big name developers in China. The reason why the Chinese are so confident in Iskandar is because they are see a replication of the Shenzhen -Hong Kong mega region here in Iskandar – Klang Valley – Singapore and the catalyst would be the rail link completions in 2019/2020.

9) Business investments in Iskandar has been rising steadily. For the period of Jan – July 2013, Johor has received the highest investments in manufacturing according to MIDA, a feat that is normally achieved by Selangor or Penang. Businesses in Singapore are in various stages of expansion into Iskandar driven by the lower cost of land, labour, and encouraged by the proximity to Singapore. These businesses Include multinationals headquartered in Singapore to Singapore SMEs. Examples include Hersheys opening a large chocolate manufacturing plant in Senai to China’s Huawei setting up a shared services facility in Nusajaya. Ascendas, a leading business space provider in Singapore is setting up a 500 acre techpark in Nusajaya to cater for this growth of businesses moving over to Iskandar.

Now with all these factors in place, its no wonder that Singaporeans are flocking in droves to buy Iskandar Property Malaysia. The question however is:
1. How long will it take for all these initiatives to take effect and be real on the ground for people living there?
2. The Iskandar region will take 10-20 years before it is fully developed. As an investor, what are your timeframes and are your investments in line with those timeframes?
3. Which locations in Iskandar will be the central business district, which will just be a holiday/ retirement home, which will be the industrial centers? Do you understand where your investments will be in 3-5 years time?
“4. Who do you expect to sell your property to? How much do you expect to rent it for? Are you prepared to hold your property in case you cannot rent it out?

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