Prices rise sharply in parts of Johor Bahru

Average home values in some parts of Johor Baru rose sharply during the second quarter, appreciating over 10%, according to The Edge-KGV International Property Consultants Johor Baru Housing Property Monitor 2Q2012.

“Improved connectivity is one of the main reasons housing prices on the secondary market in certain areas are rising,” says KGV International Property Consultants (Johor) Sdn Bhd director Samuel Tan. He expects prices to increase dramatically as more new connections come up.

Homes in the Nusajaya/Skudai areas led in terms of capital appreciation in 2Q, thanks to the new Western Coastal Highway and Eastern Dispersal Link (EDL), which was opened to the public in April.
“These are also traditionally popular areas with schemes such as Bukit Indah, Taman Perling, Taman Sutera Utama and Taman Laguna,” Tan tells City & Country.

Prices of 2-storey terraced houses in these areas were up by 6.25% (to RM340,00 in Taman Impian Emas) to 22.2% (to RM550,000 in Horizon Hills). In Nusa Idaman, similar units rose 19.05% to RM500,000.

Besides the new highways, the higher prices were also due to newer designs and the nearing completion of catalytic projects in Nusajaya, such as Legoland, EduCity and Marlborough College.
“The fact that house prices here have appreciated substantially since their launch will give prospective buyers the confidence to invest,” says Tan.

Semi-detached houses in these areas have also appreciated, albeit modestly. The value of older units in Taman Bukit Indah rose 13.3% q-o-q to RM850,000 in 2Q. Meanwhile, the prices of semidees in Taman Impian Emas and cluster homes in Horizon Hills increased by 6.89% and 6.6% to RM620,000 and RM800,000 respectively.

In Taman Sri Pulai Perdana on Pontian Road, the average value of 2-storey terraced houses rose for the second consecutive quarter by 10% to RM220,000. However, the prices of semidees here have stayed put for 2½ years running.

“It is a case of a lack of high-end housing on Pontian Road. Houses by Mah Sing Group Bhd [the developer of Taman Sri Pulai Perdana] command a premium with their better designs. When the market is on the upswing and people are upgrading, they will obviously choose schemes with newer designs and quality finishing,” observes Tan.

Over at Plentong/Pasir Gudang, the average value of 2-storey terraced houses in Taman Molek rose 15.38% to RM600,000 while similar homes in Bandar Baru Permas Jaya saw their average value gain 10% to RM330,000.

Tan attributes this to the newly opened EDL as well as the upcoming “Little Japan” in Taman Molek, Johor Baru. The new township is envisioned by asset-building consultancy Global Asia Assets (M) Sdn Bhd (GAAM) as a second home for wealthy Japanese.

According to reports, the enclave aims to attract 2,000 rich Japanese to make Johor their second home. Little Japan will feature retirement homes, medical facilities, restaurants and spas.
GAAM expects these migrating Japanese to plough RM500 million into the scheme’s luxury apartments and landed homes.

Meanwhile, 365 Japanese investors have purchased over RM400 million worth of luxury homes, including units in Towers 3 and 4 of Molek Pine condos and commercial properties, with plans to relocate soon.

Semidees in Taman Molek appreciated 9.1% to RM600,000 while units in the first phase of Park View at Bandar Seri Alam inched up 3.45%, also to RM600,000.

At Tebrau/Kempas, only semidees in Austin Heights saw their prices increase by a slight 3.45% to RM600,000.

Prices of high-rises going up
Most apartments and condominiums sampled in the property monitor also saw their prices rise in the quarter.

“There has been a paradigm shift in accepting stratified living over the last five years. This could be due to the amenities, security and the younger generation being more open to high-rise living,” says Tan.

Suria Mas apartments appreciated the most. For example, the price of an 850sq ft apartment rose 13.63% to RM250,000. Newly launched units were priced at RM300 to RM350 psf, which pushed up the value of older units on the secondary market that were launched at RM200 psf, says Tan.
“There is a captive market for properties in this range. The prices of the smaller units are very affordable.”

The average price of a mid-level, 1,469 sq ft unit in Molek Pine’s Tower 2 appreciated 12.07% to RM650,000, propped up by the higher prices of units bought by the Japanese in Towers 3 and 4.
At the Straits View Condominium, mid-floor units with built-ups of 1,600 sq ft appreciated 8.3% to RM650,000 while at Lagenda Tasek, 1,040 sq ft units inched up 3.45% to RM300,000.

While there was some movement in property prices, the same cannot be said of the rental market. Rents have not grown for at least the past 1½ years, pushing yields down.

Tan says it will take time for the rental market to catch up with capital values. “As prices increase, some may opt to rent, thus widening the rental market and increasing rates. Similarly, those who bought new properties would expect a certain level of yield. When that happens, the older properties will follow suit.”

Serviced apartments and emerging hot spots 
Moving forward, Tan expects a “dramatic change in values” on the secondary market with further new connections opening up.

He identifies the Tampoi/Skudai and Johor Baru city areas as two emerging hot spots where serviced apartments are becoming popular due to the interest of foreigners and young buyers.
In Tampoi/Skudai, serviced apartments in Danga Bay, such as Tropez Residences, Azea Residences and Platino, are especially sought after.

“In the city, serviced apartments are turning into hot items as seen in the sales of Paragon Residences, V Summer and Sky Suites. Prices range from RM500 to over RM1,000 psf,” observes Tan.

“This is a good development because the city’s transformation can only be successful with a population influx.”

The current favourites are Nusajaya, Tebrau and Plentong. Within Nusajaya, popular serviced apartments are Imperia, Impiana and Somerset at Puteri Harbour and 1Medini Residences at Medini Iskandar Malaysia. Landed schemes in demand are East Ledang, Horizon Hills, Nusa Idaman and Leisure Farm.

In Tebrau, some of the more popular serviced apartments include 1Tebrau, Pandan Residences, Sky Peak, Austin Residences and Larkin Heights while popular landed schemes are Taman Adda Heights, Taman Setia Tropika, Taman Seri Austin, Taman Gaya, Taman Setia Eco Cascadia and Taman Setia Indah.

At Plentong, some serviced apartments to look out for are Molek Pine, D’Ambience, Botanica Bayu Puteri, Marina Bayu Puteri, Senibong Cove, Bandar Seri Alam and Taman Ponderosa.

High-rises launched in 2Q in Plentong/Tebrau experienced take-ups of over 50% as these are highly populated and established areas.

Some of the major developments announced recently in Johor are UEM Land Holdings Bhd’s Gerbang Nusajaya township, the appointment of consultants for the new connection between Singapore and Iskandar Malaysia, the launch of Petronas’ Refinery Petrochemicals Integrated Development (RAPID) in Pengerang, the opening of new key attractions, such as Lego Land theme park and the Family Indoor Theme Park in Nusajaya, a new megamall in Southkey and more investments in Iskandar Malaysia in 1H2012.

Gerbang Nusajaya is a 4,500-acre township that will come up just off the Second Link Highway. It has an estimated GDV of RM18 billion and will take 25 years to complete. Details of the first phase, due for a year-end launch, are not available yet.

“The first phase is crucial. Since the township is huge, it depends on how UEM Land staggers the supply. If it does it so as not to shock the market, then things will be okay,” says Tan.

Consultants have already been appointed for the proposed Malaysia-Singapore Rapid Transit System, which will see trains running from JB Sentral in Malaysia to Republic Polytechnic in Singapore. The Malaysian and Singaporean governments are still undecided on whether it will run above the ground or undersea.

“Interest in and expectations of this project are high. I think the market will start to see an impact by 2015 to 2016 when people can see real work being done,” says Tan.

The RM65 billion RAPID in southeast Johor was launched in May and is reported to be on track. The refinery is expected to create employment for up to 45,000 contract workers during its construction period and 4,000 permanent jobs when it is completed in 2016. “Upper-level executives may want to take up a waterfront home in Pasir Gudang or a serviced apartment in the city. It’s only a half-hour drive away through the Senai-Desaru Highway,” Tan says.

He points out that RAPID will benefit not only the immediate area but also the Tanjung Langsat industrial park in Flagship D of Iskandar Malaysia, where about 1,300 downstream vendors are based.

In Nusajaya, key attractions such as Legoland and the Puteri Harbour Family Indoor Theme Park featuring much-beloved cartoon characters, such as Hello Kitty, Thomas and Friends, Bob the Builder, Barney, Pingu and Angelina Ballerina, are set to on Sept 15 and in 4Q respectively.

The proposed megamall in Southkey is to be developed jointly by IGB Corp Bhd and Selia Pantai Sdn Bhd. It will be based on IGB’s flagship Mid Valley City in the Klang Valley and may comprise a 1.5 million sq ft mall, one or two hotels, luxury high-rises and office towers. Construction is scheduled to start late this year or early next year.

Tan says the sheer size of the mall will make it a regional destination as the local catchment will not be able to sustain it.

Last but not least is the RM10.67 billion worth of investments in Iskandar Malaysia in 1H2012, bringing total cumulative investment to RM95.5 billion. Of this, RM41.35 billion has been realised.
With such changes to come, Tan expects a transformation of Johor Baru’s property market. “It will be a different Johor Baru. There will be no more cheap terraced houses. Paying RM700 to RM1,000 psf for a home in the city was unheard-of three to four years ago, but it is happening now. No developer would have thought of building serviced apartments [then], but there is a demand for them now with the changing lifestyles.”

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3 Responses to Prices rise sharply in parts of Johor Bahru

  1. Pingback: Johor Bahru — a metropolis in the making | Iskandarhome

  2. Pingback: Iskandar effect on JB | Iskandarhome

  3. Pingback: All eyes on JB / Iskandar Malaysia | Iskandarhome

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