It does seem that negative news continue to surround Iskandar these days. Oversupply situation today, potential further oversupply for the next two years as well as the much lower demand these days with the negative sentiment. The craze of Singaporean buyers with Iskandar has reduced tremendously too. I remember just a few years ago, Singaporeans were visiting Iskandar in busloads. Of course, the buying is still continuing today but it’s more selective. Read here: Iskandar for Singaporeans: Reversal or realisation? Then again, when we think objectively, perhaps this is better than simply buying and later simply dumping?
In terms of actual numbers, the the value of property transactions in Johor had fallen by 33 per cent quarter on quarter (q-o-q) in the fourth quarter of 2014 (4Q14). This compares with minus 12 percent for KL while Selangor and Penang both had some small increases of 2 percent and 8 percent respectively. The launching of projects with thousands of units per developer does not help matters too. More new units are coming and for the developers who can wait, they are really waiting today. Maybank IB Research said that industrial properties are a better investment choice in Iskandar because of the relocation of small medium enterprises (SME) from Singapore as well as the smaller supply compared to the usual residential and commercial properties.
Can the sentiment become positive again? Some said that it may become better once the cooling measures by the government is removed. Especially the two percent levy on foreign purchases and a higher floor price for foreign buyers. I do not think this would be the key issue. I think the key issue remain that there must be changes or improvements which can be seen or felt. For example, the start of the High Speed Rail or the connection between Iskandar and Singapore is enhanced further. Secondly, the number of jobs available, especially the higher pay ones starts to increase. Third, the whole sentiment for ASIA is up again, led by China and not currently where even China is ‘coughing.’ Can these three happen? Happy anticipating.
written on 17 Apr 2015
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