There's just too much liquidity in Singapore that attracted so many developers around the world here to soak it all up. Even with all the measures implemented by the Singapore government, the property prices still continues to go up. The few quantitative Easing from the US federal government perhaps worsen the situation. We have all seen developers from London, US, Thailand, Malaysia and now even Taiwan flocking here to take a pie of the liquidity.
Be very careful when buying properties in Malaysia. It can go very wrong unlike in Singapore or other developed nation where the law is more transparent. We have all heard of stories and seen many uncompleted buildings in Johore and buyers left in the lurch.
Always remember that Malaysia has plenty of land and there is no hurry. It takes 4-5 hours to drive from Singapore to KL so that's the amount of land they have (at least half of the total). The only difference is the scarcity of prime location which is usually limited. That should be a key considerations. Be also prepared to use it as a 2nd home or vacation home instead of just for investment purposes. It is just too uncertain and there isn't a proven economy there yet. Sure there are talks about medical hubs, education hubs, whatever hubs, etc. None are proven yet and these are only their plans. The education hub is taking shape but you do not know for how long. There is less transparency as compared to the developed nations. There are always talk of corruptions and land being sold above market prices. Be careful, be very careful. The policies are also subjected to flip flops. Remember all the fuss and flip flops about the white immigration forms? Or the biometrics? My point is that their policies doesn't seem to be very well thought out first before they implement them. That is a red flag on it's own. Unless you are the remiser king Peter Lim where you are just a phone call away from the royal family. An ordinary investor will have no recourse when the developer runs away or just stop the project mid-way.
It will make alot of sense if you are considering a vacation home there too instead of just for investment. There are just too many uncertainties.
The analysis are just my own personal opinion and please do your own homework before making any decisions.
My main selection criteria will be:
- Location
- Developer. An extremely important criteria for Malaysian properties.
- Price
Of course there is the potential capital appreciation and the rental yield. I think the new johor economy is just too premature to even forecast a rental yield. Have you heard of any expatriates relocating in Johore? There may be more in future but currently too little to have any meaning. The only potential i can see is the hospitality sector. There are new attractions planned or already opened (legoland) for Iskandar. Other than that, i wouldn't put my money it in. I rather buy it for my own weekend stay.
Ok, enough said so let me start.
Setia 88
- Location. This has a rather good location. It is near the holiday plaza and Taman sentosa. These are some of the most popular places for Singaporeans and Johorean. It is also near to the future midvalley JB Mega Mall.
Speculated to be next to Taman Sentosa or the location of the military camp.
- Developer. This is a reputed and a major developer so the risk factor is lower. They are also the developer for the Eco city at KL, next to the Mid-valley mega mall.
- Price. RM 700 psf. Size from 500-1500 sq ft. It is aimed at the luxury segment, probably referring to Singaporean. I don't see any Johorean will buy an overpriced condo where they can buy a big piece of landed property.
TwinGalaxy
- Location. This is in the same area as Sertia 88 so the location is also rather good.
- Developer. Not too familiar with this property developer but it should be smaller than the Sertia group.
- Price. RM440 psf?
1Tebrau
- Location. This location is much further down from Sertia 88 and Twin Galaxy. It is nearer to the Jusco and Carrefour malls. I think it is abit too far away from all the actions. It claims to be near the future midvalley JB megal mall.
- Developer. I am also not familiar with this developer.
- Price. RM650 psf. This is 99 years leasehold. My reaction when i heard it is leasehold is, why would anyone buy a leasehold in Johor at this price? Malaysia has full of land so i can't understand why they offer leasehold.... one might as well pay slightly more to have freehold. If investors do their homework, i doubt this project will do well.
D'Esplande Residence @ KSL city
- Location. The location is also rather good as it is near to the heart of the action. It is also near Holiday Plaza. The concept is pretty good as it has a rather medium sized mall (4-5 floors) below the residence. The mall has also a cinema so it can attract the crowds. The parking situation is bad even with just the mall. Imagine when the residence's condos are built, it will be much worst.
- Developer. Internet has been rife with complaints of delays. It was still unfinished as of 3 months ago when i went there for shopping. The mall is ready though.
- Price. RM 600 psf?
Somerset Puteri Harbour
- Location. This is a totally new location from Johor bahru as compared to those developments mention above. It is along the Tuas causeway. The things going for this development is that it has a four storey RM350 million indoor theme park 2 buildings away, along the same waterfront. The theme park features attractions like Hello Kitty (1st outside japan), Bob the builder, Barney, thomas and Friends. For those who have kids will know how kids go crazy over these cartoon characters which we can never comprehend. It is also nearer to the Lego land so there's plenty of entertainment that is worth at least 2 nights stay. I forsee that it could become a short getaway for Singaporeans or KL folks, 3 day 2 nights trip to Legoland and the indoor theme park. For that, Traders hotel is also building a hotel next to the indoor theme park which is just beside Somerset Puteri Harbour. For this reasons alone, the hospitality sector should do well in the short to medium term as there is a lack of quality hotel in this part of johore. If you don't believe me, try searching in the internet for hotels near legoland Malaysia and you will see what kind of hotel pops up. In addition, it also has a shopping mall below the residence. It is only a short walk to the new immigration and custom. In future, you can take a ferry from Singapore and alight there instead of driving.
- Developer. A joint venture between UEM land and UMland. Both are big developers so perceived to be alot less risky. The service apartment is also managed by Somerset which belongs to the Ascott, a member of Capital Land, a major developer in Singapore. Ascott is the biggest service apartment company in the world. There's the added comfort of knowing the Ascott group has huge customer base and marketing arms around the world
- Price. Approximately RM800 psf. Appears to be the highest among all perhaps for a reason. However, Somerset has a contract to manage for 10 years as service residence and pay a yield depending on the occupancy. After the 10 years, you can decide if you want to use it for your stay or continue to let Somerset runs it. Bad news is that it is all sold out within days of launch. There are only 168 units.
Senibong Cove
- Location. I am less optimistic about this Senibong location than the other city centre locations. It is just too far away from the action. The traffic congestion from the city centre to Senibong is a pain especially during rush hours. If you are familiar, Senibong is where there's the famous laksi lemak and Permas Jaya with the Jusco supermart. A drive along Senibong may put you off from buying any properties here. You can see some dilapidated condominiums in that area. Maintenance seems to be a major problem in many of their properties. There's plenty of land here so i am really unsure of the demand here. Property prices are driven up by lack of supply but there could be more supply than demand.
- Developer. A development by Walker Corporation. They are great waterfront developer in Australia (US and canada) but I am not sure if they are familiar with johor. I am surprised they enter the market here. Australia is very transparent and straightforward for businesses but Malaysia is a different ballgame.
- Price. RM480 psf?
The prices are mainly estimation by taking their advertised price and divided by 1000 Sq ft. It is likely not accurate as the psf depends on the size of the apartment but it is just to give a feel. To know the price, better to ask them directly.
There's no right or wrong in property selection as it depends on things like buying objectives, risk appetite, budget and preference. It will only be years later when one realise if they have made the right choice or not. If you make a lost, you can always treat it as a long term investment like Temasek holdings, then you won't be wrong too : )
This serves only as a guide for your considerations. I am not an agent but just an investor so i hope to share my considerations to fellow investors.
