The REAL deal: Buying property in 2024?

• Property cycles, once a vague but nevertheless useful guide to the timing of new property launches, no longer exist. The only predictable bit about the market these days is unpredictability. Even location, once the golden and steadfast key to any successful property launch, on its own no longer guarantees success.

Would you buy property in 2024? If so, where, when and in what should you invest your money?

Before we attempt to peer into our crystal ball, which we don’t have, let us make a quick detour and step briefly into the shoes of a typical developer. Are you on the verge of calling it quits? Market uncertainty is not going away and the industry is braced for struggles unimaginable.

Property cycles, once a vague but nevertheless useful guide to the timing of new property launches, no longer exist. The only predictable bit about the market these days is unpredictability. Even location, once the golden and steadfast key to any successful property launch, on its own no longer guarantees success. While easy accessibility remains central to any sought-after property, changing affordability and lifestyles have emerged as significant investment decision influencers.

Hence, for the more established developers, the ability to replicate their earlier successes is no walk in the park. Housing affordability remains very much a stumbling block to homeownership dreams mired in sluggish income growth. At the same time, the cost of land, construction, compliance and the general cost of doing business are rising.

That said, neither property development nor property ownership will go out of fashion. It had better not! The livelihood of the families of more than 160 sub-industries is dependent on the health of the Malaysian property development and construction sector.

Real estate was, and still is, an investment class that cannot be ignored. Good or bad times notwithstanding, smart real estate investments will continue to reap rewards apart from acting as a safe haven of sorts for the ringgit.

To buy or not to buy?

Now for the million-dollar question — is 2024 a good time to invest in property? I find it amusing how those asking this evergreen question usually expect a straight “yes” or “no” answer. If only life were so simple …

It is a cliche but true. Any time is a good time to buy property. It is the why, the what and the how of property investment that need to be carefully considered.

The fundamental rule is to ask yourself why you are buying and whether the identified property fits the bill. How will the investment be financed? If the Covid-19 pandemic has taught us anything, it is to never ever assume that plans made will follow their course. Committing to a big-ticket item based on the sole assumption that income will be adjusted upwards in the coming years is tricky, if not foolhardy. It is a different story altogether, of course, for those blessed with financial help from family members.

The moral of the story: Never buy property because you have fallen head over heels in love with its marketing narrative. Or because the show unit left you in seventh heaven. Don’t buy because your peers insist it is a not-to-be-missed purchase. Don’t buy just to appease your in-laws!

So, what and where to buy?

“Hotspot” is a sexy description of addresses deemed to offer high value appreciation, translating into significant investment potential. However, hotspots are not necessarily for everyone since ultimately, the decision hinges on an investor’s individual needs. For instance, one could be buying a home near the family house for logistical reasons. On the flip side, one could be buying a home away from the family house — also for logistical reasons! As they say, one man’s meat is another man’s poison. So, the decision boils down to the “why” of buying property.

Specific needs aside, where are the prominent property hotspots? Johor Bahru (JB) must surely top the list. Developers were busy landbanking in the state capital last year and it does not look like they will stop this year.

The JB property market excitement is now fuelled mainly by the industrial sector and, by extension, the residential and workers’ housing sector. Expect to see more warehouses, distribution and data hubs as well as healthcare and wellness facilities in the days ahead.

JB’s fate rests heavily on the purchasing power of the Singaporeans and Malaysians working on the island state whose presence is expected to grow significantly with the completion of the JB-Singapore Rapid Transit System (RTS) Link.

Dubbed an economic and property game changer, the 4km-long railway shuttle link will be served by two stations — one in Bukit Chagar, JB, and the other in Woodlands, Singapore. The link is expected to catalyse the further development of JB and nearby land. Hence, the excitement in anticipation of RTS’ operation in 2026.

Another noteworthy driver of the Iskandar property market is the RM5 billion Coronation Square. The project kick-started the Ibrahim International Business District (IIBD), identified as the catalyst for Johor’s plan to transform JB into a world-class metropolis. Coronation Square, comprising a mall, serviced apartments, office blocks, a hotel and medical suites, is slated to be completed by 2028.

The sight of robust building activity on the site of Coronation Square, coupled with the significant progress in the RTS in recent times, has lent credence to the state’s promise of a new and economically robust JB very soon.

Apart from the tipping points brought about by these infrastructure projects and development, the market is also spurred by government initiatives to designate Forest City as a Special Financial Zone (SFZ), the expected announcement of a Special Economic Zone (SEZ) and prospective revival of the high-speed rail (HSR).

Compare this with the bleak scene in JB about a decade ago when developers were saddled with unsold units due to weak market sentiment caused partly by earlier price escalation. The introduction of cooling measures and massive building activity were of no help. Attempts to woo Singaporean and other foreign buyers also failed to achieve the desired results.

With all the dots of success now already plotted on JB’s map, it is key that all these are joined for JB to take off as planned. Malaysia must deliver what we have promised.

As for in what and where specifically in JB to invest, go back to your checklist of the why, what and how of property investment.

Klang Valley hotspots

The highlighting of property investment opportunities would be incomplete without mentioning the Klang Valley, the hub of property development activity.

The pockets of undeveloped land in established addresses can be interesting as will rare greenfield developments taking shape outside mature townships. New townships are usually well planned but it takes time and financial stamina before the early-bird investors are rewarded handsomely in value creation. However, this will only be a reality if the developer is reputable and responsible. So, choose your developer carefully.

Popular addresses

A property portal has identified Petaling Jaya, Mont’Kiara and JB as the top three urban locations searched on its platform last year. These were followed by Cheras, Puchong, Bukit Jalil, Kuala Lumpur, Subang Jaya, Bangsar and Cyberjaya. Of course, the size of property and property inventory in the locations sampled matter. Nevertheless, it is noteworthy that interest has returned to Cyberjaya.

Developed way back in 1997, Cyberjaya was launched with a bang but fragmented planning with varying interest from the many stakeholders has not done the location justice. As expected, slowly but surely, this is changing as accessibility improves and inner KL gets more congested. With time, Cyberjaya — or for that matter Seremban and even Rawang — somehow seem to be getting “closer” to KL.

Happy property hunting. But don’t forget to do your research!

Au Foong Yee ([email protected]) is an editor emeritus at The Edge Malaysia.

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