RTS-MRT cross-border link will be the game-changer for Singapore and Malaysia resulting in enhance property values on both sides of the causeway
By Khalil Adis
Bukit Chagar in Johor Bahru and Woodlands North in Singapore are set to be the next property hotspots once the planned cross-border rail service linking Johor’s Rapid Transit System (RTS) and Singapore’s MRT system is completed in 2018 to 2019.
First announced by Singapore Prime Minister Lee Hsien Loong and Malaysian Prime Minister Dato’ Sri Najib Tun Abdul Razak at the Leader’s Retreat in May 2010, the cross-border rail service will enhance cross-border travel and bring about a positive impact on property prices on both sides of the causeway.
Already, the project is making good progress with a joint feasibility study completed.
It is now moving on to the next phase of development whereby Singapore and Malaysia will make a joint announcement by end 2014 on whether both countries agree on the final alignment.
Initially, four sites were identified by Iskandar Regional Development Authority (IRDA) during a public outreach programme to gather feedback from Johoreans.
They include Tanjung Puteri, JB Sentral 1, JB Sentral 2 and Bukit Chagar.
However, as R&F had already acquired the piece of land at Tanjung Puteri, three remaining sites remain.
While Johor officials had announced in September 2014 that it had chosen Bukit Chagar as the terminating station, Singapore must also agree with the alignment linking it to Woodlands North MRT station via the Thomson Line.
Regardless whether Bukit Chagar is chosen or not, JB Sentral and Woodlands North are expected to draw more and more people to live-work-play there as these townships will serve as a gateway to Malaysia and Singapore respectively.
Currently, the toll hikes on both sides of the causeway and the massive traffic jams on weekends are issues that have somewhat affected investment sentiment in Iskandar Malaysia.
As a result, those in the food & beverage, car washing and petrol kiosks businesses have seen a noticeable slump in their earnings.
Over in Singapore, Malaysian-registered vehicles are reluctant to make unnecessary trips to the city-state.
In October, Malaysian workers were left stranded when bus drivers staged a protest by refusing to pay for the tolls, forcing workers and school children to brave the causeway.
However, once the transport hubs are completed, more and more Singaporeans and Malaysians will want to live close to the stations as they do not have to pay tolls on both sides of the causeways.
In addition, it will shorten their commute time.
This is especially so for those who do not have their own transport and need to commute on a daily basis.
Rejuvenation projects announced in Woodlands North and Johor Bahru
Singapore’s Urban Redevelopment Authority (URA) has already announced plans to transform Woodlands North into an up and coming business district.
Under the URA Draft Master Plan 2013, Woodlands Regional Centre in Woodlands North will be developed over the next 10 to 15 years as a vibrant live-work-play environment that will serve as the key commercial cluster in the north.
This will give a huge boost to its commercial and industrial districts, particular companies that require huge pool of Malaysian workers and businesses that are located there.
Small and medium enterprises (SMEs) who are more cost-sensitive will also be drawn to move away from the city centre to Woodlands Regional Centre where rental costs will be significantly cheaper.
This, together with the cross-border rail service to Johor Bahru, will draw workers and executives to want to live here.
URA’s masterplan has already earmarked land use for new housing projects as well as future waterfront promenade as part of the exciting new growth cluster that will serve as the gateway to Malaysia.
On the other side of the causeway, Johor Bahru, IRDA has already embarked on an ambitious RM1.8 billion Iskandar Malaysia Corridor Transformation Programme to rejuvenate Johor Bahru.
First announced in March 2012 by Prime Minister Dato’ Sri Najib Tun Abdul Razak, this rejuvenation project will witness a new CBD coming up, preservation of heritage sites, the refurbishment of KOMTAR JBCC Mall, the opening of Angry Birds Theme Park as well as the beautification and rehabilitation of Sungei Segget.
Once the RTS station is ready in 2019, more and more Singaporeans and Malaysian Permanent Residents (PRs) will want to live in JB Sentral.
The strength of the Singapore dollar versus the ringgit mean many will prefer to buy a freehold condominium with full facilities in JB Sentral.
In Singapore, they can only afford an HDB flat.
This will spur more cross-border investments.
Impact on property prices
The lure of being just a door step or an MRT station away from Johor Bahru is a tremendous plus as commuters do not have to negotiate the perpetual causeway traffic jams especially on weekends
In Singapore, the opening of any MRT station will have a 5 to 10 per cent value increase over the longer term.
If we apply the same historical trend in Johor Bahru (as there is no MRT station in the city to make a fair comparison), we can expect property prices around here to reach around RM1,050 to RM1,100 per sq ft.
Over in Woodlands Street 81, the closest neighbourhood to Woodlands North MRT, recent transactions for HDB flats here between October 2013 to October 2014, ranges from S$340 to S$370 per sq ft.
Once Woodlands North MRT is completed, we can expect property prices in the vicinity to increase from S$357 to S$407 per sq ft.
Should condominiums be launched in Woodlands North, we can expect at least a 20 per cent premium in per sq ft pricing.
The RTS-MRT link will indeed be a win-win situation for both Singapore and Malaysia as it will enhance property values on both sides of the causeway and reduce traffic congestions.
This story was first published by Real Estate Malaysia in its January 2015 issue.