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It looks like downward trend in residential property prices on the secondary market in Johor Baru, apparent since 4Q2008, will continue to plague the state’s property market for a while yet.
According to KGV-Lambert Smith Hampton Johor director Samuel Tan, homebuyers in Johor Baru are maintaining a cautious stance.
“Despite the recent slight stock market rally, the outlook for the economy and Johor Baru’s property market remains uncertain, he says in presenting The Edge/KGV-Lambert Smith Hampton Johor Baru housing property monitor for 1Q2009.
He adds, however, that there will not be a drastic drop in prices but a slight downward adjustment for both the primary and secondary market, especially the outskirts of Johor Baru where demand is poor.
The rental market will experience a similar downward trend although some locations are seen doing better than the others.
The Johor Baru property market in 1Q2009 has been quiet in part due to the festive season. “Some developers took the initiative to come up with creative sales and financing packages, such as the 5/95 scheme by S P Setia, to promote their properties in this tough economic environment,” says Tan.
The total transaction volume and value of Johor’s residential properties have decreased marginally by 1.6% and 2.4% respectively in 2008, compared to the previous year. In Johor Baru city, total transaction volume and value declined by 15.9% and 14.3% respectively in 1Q2009 from 4Q2008, says Tan.
“Most buyers have been adopting a wait-and-see attitude since last year, while many are still reluctant to commit to big-ticket items in view of the uncertain employment environment and business outlook for this year,” Tan adds.
Secondary market
On the secondary market, Tan notes that prices in most housing schemes within the city area have remained reasonably stable in 1Q. Properties in outlying areas are more vulnerable to downward adjustment in prices due to poor accessibility and lack of maintenance, among other reasons.
Tan says, of the schemes surveyed in 1Q2009, 59% experienced price declines of about 10% from 4Q2008, with the rest remaining unchanged.
Also in line with the downward trend, prices for some apartments/condominiums sampled dropped in 1Q2009 — the first such decrease since 1Q2008.
For example, a unit at Aloha Towers dipped to RM340,000 from RM350,000 in the previous quarter, while a condominium at Stulang View dropped to RM360,000 from RM370,000 in the same period.
“The overall reduction in housing demand and competition from newer apartments and landed homes within the vicinity resulted in a decline of selling prices for these condominiums,” says Tan.
Primary market
In 1Q2009, there were fewer launches as a result of the market slowdown, with most developers concentrating on middle to mid-high end properties, with prices tagged from RM250,000.
In addition, “the first quarter of a year is traditionally a slow-moving period as most people are still in holiday mood”, Tan says.
Along the Tebrau Corridor, some 28 units of 2-storey linked-bungalows — Aspen 3B — (land area 3,600 sq ft, built-up 2,983 sq ft), were launched in Austin Heights, with prices starting from RM780,000.
Within the Nusajaya Corridor, new launches include 44 units of linked bungalows (Orion) in Taman Bukit Indah with land area of 3,450 sq ft and built-up of 3,179 sq ft, at prices ranging from RM838,000 to RM868,000. In the same scheme, 2- storey terraced houses (land area 1,400 sq ft, built-up 2,579 sq ft), priced from RM328,000, were also launched.
At the Pontian Corridor, some 349 units of 2-storey terraced houses in Taman Sri Pulai Perdana 2 (land area 1,400 to 1,680 sq ft; built-up 2,244 to 2,597 sq ft) were sold from RM250,000 to RM310,000.
A waterfront project known as Paradise Service Residency was also launched during this quarter, offering 274 serviced apartments (built-up 609 to 1,406 sq ft) at prices starting from RM232,000. Tan says buyers who opt for the fully furnished units will be able to enjoy a five-year rental guarantee at 7% per annum.
Also put on the market were 24 units of 2-storey semi-detached houses (land area: 3,368 to 9,009 sq ft, built-up 2,936 to 4,282 sq ft), with prices ranging from RM691,490 to RM1,092,310.
Tan says the government should consider more direct measures, such as exemption of stamp duty and the introduction of housing grant for first-time house buyers, to spur buying interest.
Going forward, apart from freebies and creative payment schemes, developers will also need to continuously provide quality homes, he say. “The rule of survival of the fittest will prevail in today’s challenging environment.”.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 759, June 15 – 21, 2009.
