Iskandar Properties: To buy or not to buy?

Read an interesting article about property purchase in Malaysia. With the statistics, it is confirmed that landed property is still the most transacted in Malaysia according to Coassets. The findings below shows the transaction between Q12012 to Q12013.

With so many condominiums sprouting up and many more rushing in, might be a good time to review your choices and considerations.

Once again, my concern for buying a property and especially condominium in Johor is as follows:

1. Malaysians don't buy condominium but landed properties. You might ask why this matters? Well, if you want to be able to cash out and liquidate, the only group you can sell to are foreigners like Singaporeans.
2. The Malaysian government has increased the foreign ownership threshold from RM $500K to RM $1 Million. That means if you want to cash out, you cannot let go of your property to any other foreigners for anything below RM 1 Million.  I don't think you can find any Malaysians willing to buy a condominium above RM $1million. 
3. Fickle minded officials. With such fickle minded officials, you get policies that are not carefully thought through and the impact to investors. It is just too volatile and uncertain. Imagine they even change the weekends suddenly from weekend to a Friday and Saturday.
4. No rental market. There's no rental market in Johor so far. The employment market in Johor is just not so great. Who are you going to rent to? Malaysians or expatriates? There's just not that many expatriates in Johor. 
5. Too much land in Malaysia. There are simply just too much land in Malaysia. You can keep driving till you fall asleep. Even if it is not enough, there's plenty of old buildings in Johor to be torn down and rebuild. Just look around and you will find no shortage of supply.  
6. Serious price gap between landed and condominium. The average current prices of condominium in Johor is now approximately RM $1100+ psf. The average current price of a landed property can be anything from RM $250-600 psf. That gap is simply too big and getting irrational. 

To summarise, I still think that Johor property is best bought for your own stay and not for rental. If it is for your own stay, buying a landed and G&G (guarded & gated) community is a better idea if security is a concern. It looks like a bubble to me so better be rational and not to be too carried away by herd mentality. History tends to repeat itself everywhere around the globe so I think this is no exception. Sounds like a bubble, feels like a bubble and it might just be a bubble.