Sales of new residential launches improve in Johor

PETALING JAYA (April 19): The residential property sector in Johor has seen improved sales performance with 44.2% of the 7,926 new units launched in 2017 sold, according to the Malaysian Property Market Report 2017 released by the Valuation and Property Services Department (JPPH) on Tuesday (April 17).

The number of new launches last year was 15.6% lower than the 9,393 units registered in 2016 when only 29.8% of the units were sold.

Most of the new units in 2017 were 2-storey terraced houses priced between RM500,000 and RM1 million, which accounted for 4,883 units or 61.6% of the total.

Meanwhile, completions of residential units in Johor were down by 26.3% y-o-y to 9,449 units last year, while starts and new planned supply decreased by 22.7% and 10.4% to 12,264 units and 11,150 units, respectively.

As at end-2017, there were 788,584 existing residential units with another 80,354 units in incoming supply and 90,353 units in planned supply.

Despite the decrease in new supply, the residential overhang in Johor grew in 2017 with 4,376 units worth RM2.86 billion, an increase of 19.2% in volume and 11.4% in value against the 3,671 overhang units worth RM2.57 billion in 2016.

“A majority of the overhang units in 2017 were in Johor Bahru district — predominantly condominium units in the RM500,000 to
RM1 million price range,” JPPH’s report stated.

Nevertheless, the number of unsold units under construction and not constructed residential property had reduced slightly to 11,289 units (2016: 11,774 units) and 853 units (2016: 896 units), respectively.

Overall, the residential sub-sector in Johor recorded 24,886 transactions worth RM8.64 billion compared with the 26,186 transactions worth RM8.58 billion in 2016, indicating a decline of 5% in volume but a marginal increase of 0.8% in value.

Meanwhile, in the commercial segment, shopping complexes in Johor saw an uptick in occupancy while the office sub-sector remained stable. The occupancy rate for the shopping complexes improved slightly from 73% in 2016 to 79.9% in 2017. Last year also saw the completion of five malls, namely SKS City Mall in Bandar Penawar; AEON Mall in Bandar Dato’ Onn, Johor Bahru; TESCO Parit Raja in Batu Pahat; IKEA in Taman Desa Tebrau; and Paradigm Mall in Johor Bahru — all offering a combined space of 184,365 sq m.

The annual take-up of retail space grew to 261,948 sq m with the additional occupancy from the new completions. Generally, rentals of retail space remained stable for most shopping complexes, said the report.

In the purpose-built office segment, the average occupancy rate was stable at 80.5%, a minimal decrease from 80.7% the previous year.

The annual take-up was positive at 40,561 sq m, as the new completions — namely Bank Simpanan Nasional Building in Johor Bahru and Citrine @ The Lake View in Medini Nusajaya — secured good occupancy levels.

Overall, the Johor property market continued to soften in 2017 as total transactions recorded a drop of 3.1% in volume and 4.3% in value to 38,839 transactions worth RM18.61 billion. However, the decline in transaction volume and value have shrunk from double digits in 2015 and 2016 to a single digit last year.

Notable developments and catalytic projects such as the Coastal Highway Southern Link, Pengerang Integrated Petroleum Complex and golf course in Desaru Coast are expected to help support the growth in residential and commercial sub-sectors in Johor.

This story first appeared in EdgeProp.my pullout on April 20, 2018. Download EdgeProp.my pullout here for free.