Johor’s subsale market sees slight increase

JOHOR BAHRU (Oct 10): Despite sales having been impacted by weak market sentiments, the subsale market in Johor has recently seen a marginal increase of 5% in selling price, with buyers’ interest mostly concentrated on landed properties.

Samuel Tan (pictured, right), director of KGV International Property Consultants (Johor) Sdn Bhd, noted that most buyers are looking at landed houses in rural-urban fringe areas, such as in Skudai, Tampoi, Bukit Indah, Desa Bestari, Johor Jaya and Tebrau, thanks to the affordable pricing and proximity to Johor Bahru.

The high-rise residential market remains gloomy due to news reports on Iskandar Malaysia’s supply condition, he added, as Singapore buyers are more cautious about investing in the area, knowing that Malaysia’s property market is going through difficult times.

However, there is still demand for high-rise properties at the affordable price range. “Currently, newer landed property is priced over RM500,000, which is beyond the budget of most working class people. New high-rise residential units with a built-up size of about 1,000 sq ft and selling at about RM400,000 will be another choice for home buyers.”

Malaysia’s cooling measures and banks’ tightened lending restrictions have successfully achieved the intended effect – residential transaction volume plunged 21.2% in 1Q2015 compared with the previous quarter, according to Real Estate Highlights 1H2015 by Knight Frank.

Statistics from National Property Information Centre (Napic) also show that residential transactions in Johor fell to 7,719 units in 1Q2015.

In a research report, Maybank Investment Bank analyst Wong Wei Sum noticed that some developers have scaled back their launches and shifted their product mix to avoid direct competition with Chinese developers, and have since lowered sales expectations for their projects at Iskandar Malaysia.

“The Iskandar market could be hit by oversupply of high-rise, mixed-use development projects if there is no coordinated planning and control, which might lead to price volatility,” Wong explained.

Concerned about the mismatch of supply and demand of high-rise properties, the Johor government has also issued a freeze on new applications to build serviced apartments at the end of 2014.

Carefully planned gated landed residential townships would continue to enjoy resilient demand, said Johor Real Estate and Housing Developers Association branch chairman Hoe Mee Ling (pictured, right).

“Developments with good highway accessibility and availability of amenities will always have the advantage,” she added. “Residential developments situated next to or nearby mature or growing neighbourhoods will enjoy more demand; similarly industrial properties within well-planned and well-managed business parks will do well.”

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