Don’t simply buy Iskandar property because..

An article I read online said that even with the Ringgit’s depreciation, it’s not the best time for Singaporeans to buy Malaysian properties in Iskandar today. It gave three really real reasons. First is because of the incoming supply glut. It quoted Minister for Culture, Community and Youth Lawrence Wong who used data from Malaysia’s National Property Information Centre (NAPIC) to show that there are around 336,000 new private residential units in the pipeline. This 336,000 is more than the total number of private homes in Singapore. Well, I do hope the writer would give an idea on when would these 336,000 units be completed. Are they all going to be completed next year? (I do not think so)
Secondly, I also hope the writer would also state very clearly, how many number of private homes are there in Singapore. This is because from my little understanding, majority of anyone and everyone could not afford a private home in Singapore. Even for many managers, they are still staying in HDB apartments, just bigger ones. Of course, if they buy and stay in Iskandar today, it is crazy to travel to and fro because of the jams every morning.
It also said that Malaysia has ‘country risk.’ It quoted the many protests asking for the resignation of current Prime Minister and even said they have concerns about how the central bank is managing its foreign currency reserves as well as quoting one bank UBS as saying that Malaysia’s risks are no better than Mexico. It then concluded that political and economic stability are two key pillars and that if these are shaky, investors would all flee. I hope they would also listen to many more banks’ analysis. I hope they would also look at the current ratings for Malaysia from all the three rating agencies. I also hope they outline very clearly the actual foreign reserve positions versus the short-term debt and I hope they DARE to compare this to the so-called more advanced nation which everyone looks so high today.
Last, they said that during good times, Malaysia doubled the minimum price of homes that foreigners could buy to RM1 million. They said this before saying that Malaysia has also raised the capital gains tax to 30 percent of properties bought by foreigners and sold within five years of purchase. Honestly, are these cooling measures applicable to ONLY Malaysia? Secondly, if you are a foreigner looking to buy and stay, WHY would you be interested to buy and sell within 5 years? It then said that when compared to Singapore, the risk seems to be worth taking but you may not be able to dispose the property easily when the value falls below RM1 million. I agree fully to this particular statement. I also hope this is the case so that Malaysia can attract longer term buyers and not just the speculative ones.
I have no properties in Iskandar or Johor Bahru today. I also have no intention to buy one within 2015. Perhaps not even within 2016. My focus remain to be Greater KL. However, to simply write an article about Iskandar by hiding some facts here and there is totally unfair. Come on, write an objective one. Iskandar is actually a great place to complement Singapore’s continuous growth. It has never and would never be a competitor to the Singaporean property market. HOWEVER, I do not believe the prices should be too high. For example, when some prices hit RM850 psf no matter how luxurious the developer say their project is, I told my friend, ‘this is stupid and crazy and I wish people who buy all the best.’ However, if the prices remain just around the same value as a typical HDB flat in Singapore, I think this remains a good option. Looking ahead, the only issue is the linkage. Without more linkages to reduce travelling time, nothing further will happen. Happy skipping or jumping in. It’s a decision everyone should be responsible for.
written on 12 Sept 2015
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