10 reasons why you should invest in Iskandar Malaysia

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Aerial view of Senibong Cove with the Straits of Johor and Sembawang Shipyard at the backdrop. Photo: Khalil Adis Consultancy.

There are many opportunities to be sought in Iskandar Malaysia in 2016. We list our top 10 here.

By Khalil Adis

Check the masterplan. Caption - Aerial view of Iskandar Puteri in Iskandar Malaysia. Iskandar Puteri is one example of a well masterplanned township development

Aerial view of Iskandar Puteri. Photo: Khalil Adis Consultancy

Reason 1: Iskandar Malaysia is the top performing economic corridor in Malaysia.

Due to its close proximity to Singapore, Iskandar Malaysia is the most successful out of the five economic corridors in Malaysia. Latest figures from Iskandar Regional Development Authority (IRDA) showed that Singapore is the top foreign investor followed by China, the United States of America, Spain and Japan. The total cumulative investment from 2006 to October 2015 is now RM78.53 billion with the manufacturing sector leading the way at RM50.82 billion.

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Murals on shophouses at the heritage area of Johor Bahru old town. Photo: Khalil Adis Consultancy.

Reason 2: Tourism boost
With Singapore being an international hub and the closest to the Malaysian state of Johor, government officials are setting its sight to get more Singaporeans and international travellers to cross the border.

Figures from Johor Immigration Department showed that Singaporeans were the top visitors to the state in 2011 and 2012 with 13,448,062 and 17.192.742 visitor arrivals respectively. This was an increase of 27.8 per cent. Meanwhile, according to figures from the Singapore Tourism Board (STB), the Lion City recorded 1.72 million tourist arrivals from China and 940,000 from India in 2014. In the same year, 620,000 and 290,000 Chinese and Indian tourists respectively visited Johor.

With many using Singapore as a transit point, the aim for 2016 is to attract around five million tourists from China, India, Indonesia and the Middle East. Excluding visitors from Singapore, the figures could hit beyond the five million mark.

With so many things to look forward to by the end of this year, like taking a stroll along Sungei Segget and exploring the many rich cultural gems that Johor Bahru has to offer, 2016 could well be a busy year for the tourism industry and its related sector like retail and food & beverage.

View land reclamations at the causeway from Johor Bahru going in to Singapore. Since Iskandar Malaysia's inception in 2006, the property market in Johor had witnessed a remarkable turnaround thanks to the spi

View of causeway from Woodlands to Johor Bahru. Photo: Khalil Adis Consultancy.

 

Reason 3: Enhanced connectivity to Singapore
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.  Bukit Chagar has been announced as the final site.

Flagship A of Iskandar Malaysia includes Johor Bahru CBD and Danga Bay

A dedicated bus lane will serve the BRT lines in Iskandar Malaysia. Photo: Khalil Adis Consultancy.

Reason 4: BRT Lines
In addition, the Bus Rapid Transit (BRT) lines are expected to commence their services soon with the interchange station at Bukit Chagar. It will feature a dedicated bus lane with three lines. Therefore, this will increase the desirability for properties that are located along the lines. BRT Line 1 will span from Bukit Chagar to Tebrau, BRT Line 2 from Bukit Chagar to Senai and finally, BRT Line 3  from Bukit Chagar to Nusajaya.

Bukit Bintang Monorail Station which will be connected to the KVMRT line as part of the Economic Transformation Programme. Gen Ys should research and study new economic drivers and look for affordable propert.JPG

Monorail in Bukit Bintang. The entire train system will be connected to the High Speed Rail Station in Bandar Malaysia. Photo credit: Khalil Adis Consultancy.

Reason 5: High Speed Rail Project
The Johor stop for the High Speed Rail project will be in the vicinity of Gerbang Nusajaya, not to far away from East Ledang and Motorsports City. This will be the final leg of the Malaysian station before it enters Singapore, terminating at Jurong East.  While the station in Nusajaya has not yet been announced, government officials have indicated that it will be located close to Motorsports City near East Ledang.

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Towering office buildings in KLCC. Photo credit: Khalil Adis Consultancy.

Reason 6: A new CBD in Gerbang Nusajaya
In April 2015, Nusajaya’s master developer UEM Sunrise Berhad further revealed its comprehensive development plans for Gerbang Nusajaya which will have its own CBD similar to Jurong Lake District.

Spread across 4,551 acres of land, this second phase of Nusajaya’s development will be designed with catalytic industries similar to the various economic drivers in Nusajaya and Medini.Both these areas are home to tourism, logistics, finance, information communication technology and creative industry establishments just to name a few.

In anticipation for the HSR terminus in Gerbang Nusajaya, a number of catalytic developments have been planned. They include Nusajaya Tech Park, a 519-acre integrated eco-friendly tech park and FASTrack Iskandar which is a 300-acre ‘motorsports city’. This is the closest hint we can get on the possibility of the Nusajaya HSR station being located here. With a gross development value of RM42 billion,property values for existing homes in Nusajaya and Medini will enjoy a boost from the economic spillover.

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RM18 billion boost for the Pengerang RAPID Project. Photo credit: Khalil Adis Consultancy.

Reason 7: RM18 billion boost for Pengerang RAPID project
Outlined as one of the key areas under Malaysia’s Economic Transformation Plan (ETP), the Pengerang RAPID project aims to raise the quality of life, create jobs and income levels in eastern Johor.

Launched in 2013 with an initial investment of US$20 billion, this massive oil and gas project has already created jobs for some 50, 000 construction workers and 400 engineers. So far, the first phase, which comprises a RM9 billion Pengerang Independent Deep Water Petroleum Terminal, has already been completed in 2014. The first phase of its petroleum storage facility will have the capacity to store up to 1.3 million cubic metres of petroleum products. By end 2016, a further 4, 000 jobs will be created for trained technical staff once the project comes progressively on-stream.

Once the refinery is completed, the Pengerang RAPID project will have the capacity to produce 300, 000 barrels per day of higher grade fuels meeting European specifications and other byproducts for the different industries. RM18 billion has been allocated here as part of Budget 2016.

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A lonely stretch of road in Desaru. Photo credit: Khalil Adis Consultancy.

Reason 8: The Eastern Gate is the next growth centre
Deemed as an ‘ulu’ area, homes in Pasir Gudang are currently averaging between RM300 to RM400 per sq ft. However, this is an up and coming area as the Eastern Gate is the only zone that has received budget allocation from Budget 2016.

The Pengerang RAPID project is expected to have a spillover impact in Pasir Gudang. In addition, the budget had also allocated for a new public hospital in Pasir Gudang to cater to its growing population. With this, the Eastern Gate is poised to be the next growth centre in Iskandar Malaysia. If we study the history of Nusajaya and Johor Bahru, homes in these areas have seen almost 50 per cent increase in their values. History could repeat itself in the Eastern Gate.

The state and federal government had allocated spending for public infrastructure. These include the upgrading of the Pasir Gudang Highway and a new hospital.

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Petronas Twin Towers in KLCC. More jobs are expected to be created in Pengerang. Photo credit: Khalil Adis Consultancy.

Reason 9: More jobs to be created
With phase one of Iskandar Malaysia successfully launched in Nusajaya in 2006 and phase two currently taking place in Johor Bahru, the Eastern Gate is what many perceive as phase three of Iskandar Malaysia’s economic development.

With the Pengerang RAPID projects and a new business park in Pasir Gudang as the major economic drivers, these are expected to create job opportunities for Johoreans.

The business park for instance is anticipated to create around 12,100 jobs in the sectors of food and beverage production, garment manufacturer, printing and packaging industries, electronics, storage and warehousing, services, information technology, machinery spare parts, carpentry and furniture production and automotive workshops

Meanwhile, the Pengerang RAPID RM70 billion project spanning 2,000 hectares, has already created 40,000 jobs in the construction industry, 400 jobs for engineers and a further 4,000 jobs for trained technical staff. With the further allocation of RM18 billion, more jobs will be created.

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Hershey’s is the leading North American manufacturer of quality chocolate and non-chocolate confectionery and chocolate-related grocery products. The company also is a leader in the gum and mint category. Photo credit: The Hershey’s Company.

Reason 10: Senai and the chocolate factory
Senai and Skudai comprises agricultural, industrial and pockets of residential and commercial areas.  There are two small towns located here – Senai and Skudai.. Over the years, Senai and Skudai has developed as a hub for food & agro processing and retail tourism. In 2013, it scored a major coup when Hershey’s opened its chocolate factory here just opposite Senai Hi Tech Park.

With an investment of RM816 million, this will be Hershey’s second largest plant in the world and is expected to create 400 jobs Johoreans. It will have the capacity to produce tens of millions of Hershey’s Kisses, Reese’s Peanut Butter Cups and Hershey’s Bars every day.

DBKL’s incentive for developers needs to be implemented wisely

The recent announcement by Kuala Lumpur City Hall (DBKL) to give 50 percent discount on development charges to developers could spell good news and bad news for the consumers.

By Khalil Adis

Take a walk around Kuala Lumpur and you will notice the towering skyscrapers dotting the city’s skyline. From the Petronas Twin Towers to Menara Maxis, these buildings have become icons of Kuala Lumpur.

However, there is a cost for having such iconic buildings – the lack of green lungs in Kuala Lumpur and park connectors to connect the different land use.

Kuala Lumpur has been developing rapidly since Mahathir’s era in the 80s to the current Najib’s administration.

Some of the iconic developments that will soon tower over the city will include Tun Razak Exchange (TRX), KL Metropolis, Warisan Merdeka @ KL118, Bandar Malaysia, and the Pudu Jail Redevelopment near the Hang Tuah Monorail Station.

In TRX alone, 25 buildings will be developed ranging from offices to residences.

Delicate balancing act between development and sustainability

While the various mega developments will certainly be a confidence booster for the property market, it needs to be analysed from a bigger picture.

As someone who visits KL often, there are several things that I have noticed about the city which could be further improved – the notorious traffic jams, the lack of connectivity, and green lungs between the developments as well as the public transportation.

Look at the big picture

While I welcome DBKL’s incentive to boost the quiet property market, it needs to be implemented cautiously.

One thing I noticed about Kuala Lumpur is the fondness for overdevelopment with very little thought for its surroundings and its impact on the environment.

And when improvements are made, they seem to be more of an afterthought rather than a proper masterplan. For example, the sky bridges linking Pavilion to KLCC and the upgrading of train stations.

As such, the city’s potential is not fully achieved, especially when it aims to be a developed country by 2020.

One of the best example is Singapore. In Singapore, we have a central body called the Urban Redevelopment Authority (URA) that oversees the entire masterplan of the city.

Therefore, when developers tender for a site, they must ensure that they adhere to the planning guidelines that make the entire city work and not just their development only.

As a result, you can walk from one building to another via park connectors, sky bridges or tunnels to the MRT stations. Each different part of the city complements each other to ensure the city works.

In Malaysia, the developers are only concerned about their own projects. As a result, there is a lack of integration between the different buildings and train stations.

Dilemma in building the city

I recall back in 2009 when I attended DBKL’s briefing on making Kuala Lumpur a green and sustainable city, as well as its way of tackling the traffic jams that Klang Valley experience on a daily basis.

According to DBKL, almost one million cars enter and exit the city every day, leading to traffics jams that KLites have gotten used to.

Since 2009, you can see lots of improvements to make the transfer within the different lines smooth.

For example, you now have Nu Sentral to connect the KL Sentral Monorail Station to the main KL Sentral. Meanwhile, at the Hang Tuah LRT Station, you do not have to tap in and out to change to the Hang Tuah Monorail Station. There’s also the park–and-ride scheme to encourage car owners to take the trains.

The city now has a population of 7 million with 2.5 million jobs created in 2010 and a further 4.2 million by 2020.

If you look at the current traffic situation, there are still traffic jam issues that plague the city.

Therefore, I feel a lot more things need to be considered when DBKL announced that it would give developers a 50 percent discount on development charges.

While I laud DBKL for implementing and improving the entire transport system since 2009, developers need to ensure that they adhere to a masterplan for the benefit of the rakyat.

The good and the bad

Despite the falling Ringgit, the property market in Kuala Lumpur is quiet. Foreign investors are few and far between, while locals feel they are priced out of the market.

The advantage of this incentive is that it will jump-start the quiet property market.

Developers may also pass on the cost-savings to the consumers, which might create a good time to look for bargain hunts in Kuala Lumpur – be it for locals or foreign investors.

For locals, this will definitely be favourable, especially for first-time homeowners and upgraders who cannot afford to purchase a house and have to find an alternative in the suburbs in Selangor.

The disadvantage includes an increase in traffic congestion with more developments coming in the Klang Valley vicinity.

What would work is to have integrated green developments with park connectors and bridges linking to the future MRT line to make Kuala Lumpur an even greener city.

The various Budget 2016 announcements to spur green and sustainable development could work well for Kuala Lumpur, if implemented correctly.

Budget 2016 has allocated a substantial amount for green technologies and sustainable developments. Green is also predicted to be the buzzword for next year.

Hopefully, the budget contributes for DBKL’s masterplan, to provide a more sustainable Kuala Lumpur. This would provide some sort of incentives for the developers to build green developments and make the city more pleasant for everyone.

I am certainly looking forward to see if DBKL will be announcing that its fund is part of Budget 2016.

Iskandar Malaysia’s Eastern Corridor could be game changer for supply overhang

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Budget 2016 had allocated RM18 billion worth of funds for the Pengerang RAPID project. Photo credit: Khalil Adis Consultancy.

Developments in the eastern corridor will hopefully help to absorb the supply of homes coming on-stream and solve housing woes among Johoreans.

By Khalil Adis

Iskandar Malaysia’s eastern corridor is poised for the next phase of economic growth as various developments are being planned in the pipeline to ensure that the spillover impact is more evenly distributed so as to benefit Johoreans and give the property sector a much-needed boost.

Home to the largest oil & gas project in Pengerang as well as manufacturing and port industries in Pasir Gudang, the centre of gravity appears to be shifting away from Nusajaya and Johor Bahru as more jobs are expected to be created from two major projects in the eastern corridor.

In Pasir Gudang, a new mixed-use development by UMLand called Taman Seri Albion was announced in September last year by the current chief minister of Johor Dato’ Mohamed Khalid Nordin. Dato’ Nordin is currently the area’s MP.

The development within his stronghold is expected to create 12,100 jobs for Johoreans with 865 units of affordable housing to be built by 2018.

Over in Pengerang, Malaysia’s largest oil & gas hub is being developed under the RAPID project undertaken by Petronas.

This RM70 billion project spanning 2,000 hectares has already created 40,000 jobs in the construction industry, 400 jobs for engineers and a further 4,000 jobs for trained technical staff.

Dato’ Nordin had noted that Taman Seri Albion project is in line with the state government’s vision to see Johoreans thrive in businesses as a result of its economic spillover as well as from the oil and gas industries in Pengerang.

Drawing in investments in the manufacturing sector equals demand for homes

Since Iskandar Malaysia’s inception in 2006, the manufacturing sector is a force to be reckoned with and has continued to be a major contributor to its economic growth.

According to data from Iskandar Regional Development Authority (IRDA), from 2006 to March 2015, the region has attracted about RM166.1 billion worth of investments.

Of this, a majority of the investments (RM50.82 billion) are in the manufacturing sector followed by the residential property sector (RM40.06 billion).

The data suggests that there is a strong correlation between drawing in investments in the manufacturing sector and demand for residential properties.

Therefore, it is not surprising that this is an important sector for Iskandar Malaysia’s success as it has helped create jobs for both locals and foreigners, which has continued to lead the demand for properties.

Economic spillover impact

That appears to be the game plan in Pasir Gudang for Taman Seri Albion.

Measuring 347 acres, the township will be developed by Tentu Teguh Sdn Bhd, a wholly own subsidiary of UMLand.

Its first phase project is a business park that will comprise 89 units of terrace, cluster and semi-detached factories with a built up size from 3,276 sq ft to 14,532 sq ft.

Called Dover Business Park, its estimated pricing will start from around RM300 per sq ft with an estimated gross development value (GDV) of RM 178 million.

“The township will change the investment landscape here. It is a step in the right direction considering it is a mixed-use development with affordable housing for Johoreans,” Dato’ Nordin said at the groundbreaking ceremony, UM Land’s third township in Iskandar Malaysia and its fourth in Malaysia.

The business park’s target markets will be Malaysian and Singaporean small and medium-sized enterprises which are involved in industries such as food and beverage production, the garment manufacturer, printing and packaging, electronics, storage and warehousing, services, information technology, machinery spare parts, carpentry and furniture production and automotive workshops.

This will in turn create business opportunities for Johorean entrepreneurs from small “mom-and-pop” shops to hawkers.

Strategic partnership forged during the recent leaders’ retreat

The developments in the manufacturing and industrial property sectors in the eastern corridor of Iskandar Malaysia appear to be in line with what was discussed by both the Singaporean and Malaysian Prime Ministers at the recent leader’s retreat held in May in Singapore.

During the retreat, Prime Minister Lee Hsien Loong had reaffirmed that Iskandar Malaysia is important to Singapore.

Both countries will be implementing the ASEAN Economic Community (AEC) measures by the end of this year and deepen economic integration beyond 2015. In addition, more co-operation were announced in the manufacturing and industrial property sectors.

The target industries include advanced materials engineering, electronics, creative services and food industries.

Oversupply: Perception versus reality

The oversupply in homes has been a huge concern in Iskandar Malaysia as Chinese developers from China have been aggressively acquiring land banks with plans to build condominium units by the thousands.

The overhang in supply is certainly valid for high-end condominiums targeting foreigners from Danga Bay condominiums targeting foreigners from Danga Bay all the way to Johor Bahru.

This is where the danger is.

When it comes to mass market homes, however, the supply is still lagging behind demand as developers have been busy chasing the foreign dollar.

This is where to next focus is for the state government as there is genuine demand from Johoreans for such homes.

The chief minister, therefore welcomed such initiative at Taman Seri Albion as it will add to 37,000 affordable housing that will be coming on-stream by 2018 in Johor.

Homes to be kept within means

Housing affordability was a contentious issue during the last Malaysian general election. Johoreans had complained of rising property prices, especially within the areas of Nusajaya, Danga Bay and Johor Bahru where economic development have been taking place at breakneck speed since Iskandar Malaysia’s inception in 2006.

Dato’ Nordin said that the affordable homes that will be offered in Pasir Gudang will be different from the federal-launched PR1MA housing project.

The highest quantum price here will be capped at RM150, 000.

The homes will benefit workers in the industries and will be equipped with sustainable development features and high-speed internet connection.

With the job creation from the developments in the eastern corridor of Pengerang and Pasir Gudang, this will hopefully help to absorb the supply coming on stream for high-end homes especially among white collar professionals while solving affordable housing woes for Johoreans.

This story was first published by iProperty.com in its September 2015 issue

Ringgit’s fall, Malaysians’ gain?

With the devaluing of the Malaysian Ringgit, there are certain sectors in Malaysia that may have benefited from it.

The Malaysian Ringgit is the weakest performing currency in the region. Photo: Khalil Adis Consultancy.

The Malaysian Ringgit is the weakest performing currency in the region. Photo: Khalil Adis Consultancy.

By Khalil Adis

As a Singaporean who is often in Malaysia almost every week, I have witnessed first hand the advantages and disadvantages of the falling Malaysian Ringgit as it has declined steadily over the past few months.

From SGD$2.65 to RM1 to a recent high of S$2.8 to RM1 in June 2015, it is indeed music to the Singaporeans’ ears as it means we get more bang for our bucks.

While this is a cause for concern for Malaysians, there are sectors which may have benefitted immensely from the devaluation of the Ringgit.

Advantages

Take the recent June school holidays which coincided with the record low of the Malaysian Ringgit versus the Singapore dollar.

Singaporeans flock to Malaysia in droves to take advantage of the favourable exchange rate for vacations just across the causeway.

This has helped to boost tourism-related industries like food & beverage, hotels, home-stays and short-term rentals.

Even the Vehicle Entry Permit (VEP) imposed on the Malaysian customs has not deterred Singaporeans from going in for quick shopping trips and to wash their cars.

From City Square to KSL, Singaporeans can be seen thronging the malls and the supermarkets during the recent holiday and especially now with Hari Raya around the corner.

Over at the vicinity of New York Hotel in Johor Bahru, businesses along the stretch where car washing kiosks are located at, were brisk as many Singaporean-registered cars can be seen lining up.

In this case, even small to medium-sized enterprises benefitted immensely from the spillover impact from Singapore.

The property sector also saw a marginal boost amid a slow market in Iskandar Malaysia as some Singaporeans took advantage of the favourable exchange rate to purchase properties there.

One particular development located within close proximity to Singapore recently slashed their booking fee from RM10,000 to RM5,000 making it an attractive proposition for investors.

This was indeed a small cheer amid the doom and gloom in the property market as this is one of the few project that has continued to sell well where others saw muted sales.

Even certain projects in the KLCC area saw good take-up rates from foreign investors who saw this as an opportune time to enter the market.

With an average pricing of RM2,500 per sq ft, Singaporean investors snapped up studio units at one particular iconic development located in the heart of KLCC.

When converted to Singapore dollar, you cannot even get a similar property at a prime location in the Lion City.

As Singaporeans and foreigners need to pay state levy in each state when they purchase a property, government coffers from Johor to Kuala Lumpur have received an added boost.

That’s not all

The spillover is also felt in related industries such as law firms, interior design companies and real estate agencies.

Disadvantages

While foreigners and certain sectors in Malaysia appear to be the winners amid the falling Ringgit, Malaysians and foreigners with significant savings in Malaysian banks and exposure to businesses there will be at a disadvantage.

Let me share one scenario

Some of my Malaysian friends have avoided entering Singapore altogether or take a holiday in far flung places as the falling Ringgit means their dollar diminishes when they travel abroad.

Even Thailand is off the radar as the Thai Baht has strengthened considerably against the Ringgit.

As a result, some have opted to do a staycation instead.

In another scenario, a Singaporean friend of mine who does businesses in Malaysia and has a bank account there, sees no point in changing his Ringgit to Singapore dollar as according to him “it’s depressing as I can’t spend that much in Singapore for my day-to-day living”.

What he has done instead is to park his Ringgit in his Malaysian bank account and come back to Singapore to diversify his business.

Foreigners with significant businesses in Malaysia have also reported significant drops in their revenue as the falling Ringgit means it becomes more expensive to procure their services.

One contact of mine who works in the real estate sector said business has been down since early 2015 as Malaysian developers find it expensive when engaging foreign businesses outside Malaysia.

He had to cut staff and hire part-timers instead

Speaking of real estate, consumers buying property will be faced with rising construction costs as some of these materials are sourced from overseas. As a result, developers will then pass on these costs to them.

For those who are thinking of buying a commercial property, you will be hit with a double whammy – GST and rising construction costs.

Even the renovation sector will not be spared as they will pass on the costs to consumers for luxury materials like Italian marble and so on.

Conclusion

So what’s best way to beat the Ringgit blues?

The best hedge against it is to invest in a property and focus on capital appreciation.

I believe that is the best bet for Malaysians right now.

This article was first published by iProperty.com Malaysia in its August 2015 issue.

Are there still affordable homes for Johoreans?

Yes there is. However, first time home owners should target for homes near to new growth corridors in and around Iskandar Malaysia and near to transport hubs.

Country Garden in Danga Bay. Photo: Khalil Adis Consultancy.

Country Garden in Danga Bay. Photo: Khalil Adis Consultancy.

By Khalil Adis

Take a drive from Nusajaya all the way to Tanjung Puteri and you can’t help but notice the many housing projects marketed as “luxurious” by developers in Iskandar Malaysia.

With an average pricing of RM1, 000 per sq ft for condominiums in Nusajaya and around RM900 for condominiums in Johor Bahru, a studio unit would range from RM450, 000 to RM500, 000.

Is this something that locals can afford?

Let’s do the maths.

Assuming a loan of 80 per cent with a current interest rate of 4.45 per cent (Base Lending Rate of 6.85 per cent minus 2.4 per cent) for a RM 450,000 property, the monthly mortgage would work out to around RM1, 813.

With an average income of RM3, 000 per month, these homes are by no means affordable for Johoreans and are more geared towards the Singapore and overseas markets.

Additionally, let us look at statistics that will help give us an idea of what affordability means to Malaysians.

According to iProperty.com Malaysia’s Asia Property Market Sentiment Survey for the second half of 2014, majority of Malaysians (49 per cent) have an annual income of RM30, 001 to RM90, 000

This means their monthly income would range from RM2, 500 to RM7, 500

Of the 5,295 respondents surveyed, 5 per cent are from Johor, while the majority is from Selangor (48 per cent) and Kuala Lumpur (31 per cent).

Majority (53 per cent) of the respondents have a budget of less than RM500, 000 for their homes.

If we take a median income of RM5, 000 across Malaysia servicing a mortgage for an RM450, 000 home, this will leave them with around RM3, 200 for other expenses.

For Johoreans, however, we have to adjust this downwards to RM3, 000 as this is the average income for most graduates here.

Thus, this will leave them around RM1, 200 – perhaps just enough to get by.

Hence, affordability will be a major issue for fresh graduates and first time home owners.

The next question is then, “are there still affordable homes for Johoreans?”

The answer is yes.

Affordable homes will drive the market in 2015

With a general slow down in property transactions in Iskandar Malaysia from Singaporeans and overseas buyers, developers are already bracing for a tough time ahead.

Data from the National Property and Information Centre (NAPIC) showed that property transactions in Johor saw a steep decline of 33 per cent quarter-on-quarter in the fourth quarter of 2014.

While this will mean a challenging time for the medium to high-end market segments, this will spell good news for local buyers as affordable homes will be the focus for this year.

Already the state government has put on hold approvals for serviced apartments in Iskandar Malaysia while developers are shifting their focus to the local market.

New hot spots

The eastern corridor of Iskandar Malaysia where the Pengerang RAPID project is located at is the next area of growth. Photo: Khalil Adis Consultancy,

The eastern corridor of Iskandar Malaysia where the Pengerang RAPID project is located at is the next area of growth. Photo: Khalil Adis Consultancy,

For those of you who are thinking of buying your first home, you might be wondering, “where are the affordable homes and which areas should I target for?”

If you have missed out on Nusajaya’s and Johor Bahru’s transformations, fret not.

There are other areas where the federal government is focusing on for the next phase of Iskandar Malaysia’s economic development – the corridors of Pasir Gudang and Pengerang.

In fact, Pasir Gudang and Masai are poised to be the new hot spots as it will enjoy the economic spillover from Malaysia’s largest oil and gas hub in Pengerang.

First announced in March 2012 by Datuk Sri Najib Tun Abdul Razak, this RM70 billion project spanning 2,000 hectares has already created 40,000 jobs in the construction industry, 400 jobs for engineers and a further 4,000 jobs for trained technical staff.

This has fueled demand for homes in and around the area.

To gear up for the economic spillover from this Economic Transformation Programme (ETP), a new mixed-used development will be coming up in Pasir Gudang that is expected to create some 12,100 jobs with 865 units of affordable housing to be built by 2018.

Developed by UM Land, the project called Taman Seri Albion will comprise an industrial park targeting Malaysian and Singapore small manufacturing enterprise (SMEs) including food and beverage production, garment manufacturer, printing and packaging industries, electronics, storage and warehousing, services, information technology, machinery spare parts, carpentry and furniture production and automotive workshops.

This will not only create businesses and jobs for locals but also enhance the desirability of homes in Iskandar Malaysia’s next growth corridor.

Chief Minister of Johor Dato’ Mohamed Khaled Nordin, who was the guest-of-honour at the event, had noted that this project will add to 37,000 affordable housing that will be coming on-stream by 2018 in Johor.

“The township will change the investment landscape here. It is a step in the right direction considering it is a mixed use development with affordable housing for Johoreans,” he said.

He also noted that this project is different from the federal-launched PR1MA housing project as the highest quantum price here will be capped at RM150, 000 with high-speed internet connection.

PR1MA homes

Speaking of PR1MA homes. there are four projects of choices for bumiputeras spanning from Tebrau to Pasir Gudang..

The starting prices for the projects in Tebrau and Pasir Gudang start from RM180, 000 to RM185, 000 respectively onwards.

There is no indicative pricing yet for the projects in Masai and Pulai.

Transport hubs

The Bus Rapid Transit (BRT) lines are expected to commence their services this year.

Therefore, this will increase the desirability for properties that are located along the lines.

Areas that are worth looking into include BRT Line 1 spanning from Bukit Chagar to Tebrau, BRT Line 2 spanning from Bukit Chagar to Senai and finally, BRT Line 3 spanning from Bukit Chagar to Nusajaya.

This article was first published by iProperty.com Malaysia in its June 2015 issue.

Back to basics

Singapore, the city where I was born and raised. 2015 will see me going back to my roots.

Singapore, the city where I was born and raised. 2015 will see me going back to my roots.

With year almost coming to an end, I felt this blog posting is an apt one to thank my readers and clients.

2014 has indeed been an incredible year.

Never in my wildest imagination did I anticipate the exciting journey my life would suddenly take me – from a property journalist, author, speaker and an entrepreneur.

While I am extremely grateful for the recognition and amazing adventures that life has taken me, I feel it is also important for my readers to understand that my knowledge goes beyond Iskandar Malaysia.

In fact, Iskandar Malaysia is just a fraction of what I had covered in my career as a property journalist.

If you were to google my articles, you will see that my expertise goes beyond Iskandar Malaysia.

When Iskandar Malaysia became a hot topic in Singapore in 2010 to 2011, I kind of rode the wave as not many people knew about this special economic zone.

Since there was hunger for the topic and my article on Iskandar Malaysia was regularly highlighted, iProperty.com then invited me to give talks to fill in the gap, so to speak.

This, in addition to the book and the many articles that I had written to inform and educate Singaporeans, had many people forming the perception that Iskandar Malaysia is my forte.

When I was editor for Property Report in 2008, I was covering the regional property market that include cities like Singapore, Bangkok, Phuket, Kuala Lumpur, Penang, Iskandar Malaysia, Bali, Jakarta and Ho Chi Minh, just to name a few.

My background is in journalism and my passion has always been in writing.

Moving forward, 2015 will see me going back to basics by covering the other markets that I had enjoyed covering as a property journalist.

I never want to limit myself.

We should always endeavour to broaden our horizons.

Khalil Signature

 

 

 

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The Insider is a peek into the fun, interesting lifestyle offerings in Johor and Malaysia. Written from the perspective of writer Khalil Adis, he recommends some of the best places and things to check out from food, design, arts and culture.

The Insider is a peek into the fun, interesting lifestyle offerings in Johor and Malaysia. Written from the perspective of writer Khalil Adis, he recommends some of the best places and things to check out from food, design, arts and culture.

Dear friends and associates,

We are pleased to launch the monthly online mini-mag, The Insider, a free monthly read for some 3,000 readers from around the region. The Insider is a lifestyle and real estate title that focuses on the latest happenings and hot topics from around Malaysia.

If you would like to subscribe, kindly e-mail khalil@typewriter.sg

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The next issue will be published on Aug 28, where we will also unveil The Insider’s website.

Editorial deadlines for The Insider closes on Aug 20.

Yours sincerely,

Khalil Adis
Editor, The Insider
10 Anson Road International Plaza #26-04
Singapore 079903
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