Property experts have called on the authorities to spur economic activities in the Iskandar economic region by promoting jobs and migration to create demand for homes there, amid concerns of a looming housing glut, reported todayonline.
This comes as several property launches by Chinese developers in the region over the past year have caused concern that there would be oversupply of homes, which could hit rental yields.
The Singapore daily’s news portal said today this, coupled with a lack of clarity in the implementation of cooling measures, had led to fewer island state investors – one of the biggest foreign house buyers – investing in Iskandar.
“There seems to be a demand and supply mismatch… It takes such a short time to introduce all this supply, but the population is not there yet. Looking at the pricing, the units are not geared towards the local market, they are geared towards the overseas market. Maybe developers are very optimistic about the prospects of Iskandar, but there may be too much supply too soon,” todayonline quoted Khalil Adis, the founder of property firm Khalil Adis Consultancy, as saying.
To add to the uncertainty, the daily also pointed out Malaysia’s spat with the republic over the Causeway toll charges and vehicle entry permit fees, and the slowing down of Singaporean developers’ project in the region.
In the fourth quarter of last year, property data from the Finance Ministry showed that 118,191 residential units were under construction in Johor, with another 168,371 units planned.
The daily noted that the scale of new supply dwarfed the number of transactions, referring to official data which showed a 6.8% drop in residential property sales in Johor to 8,493 units in the first quarter of this year, compared with the previous three months.
It also said that Iskandar continued to attract investments, securing another RM9.72 billion in the second quarter, bringing the total committed investment to the economic region to RM146.2 billion since 2006.
Todayonline said the challenge now was to take measures, such as boosting commercial activity, to turn Iskandar into an international metropolis and economic centre that it was planned to be.
“I think the bigger challenge right now is for both the Singaporean and Malaysian governments to work together to really drive the Iskandar story, now that there is infrastructure in place – roads that really do exist, good properties. So we should start looking at the commercial element,” the daily quoted real estate portal PropertyGuru country manager Gerard Kho as saying.
“If commercial activities do come in the next decade or so, the residential development will go into the next phase of growth because there will be real demand in Iskandar again.”
Johor’s Real Estate and Housing Developers’ Association chairperson Hoe Mee Ling told the daily that in the long term, Malaysia’s relatively young population and the rising migration from rural to urban areas bode well for the property market.
“Infrastructure is crucial and it has been enhanced tremendously. The provision of a good public transport system is a must… With increasing migration and job creation in Johor, it will only help the property market improve,” she was quoted as saying.