Interviews with Singaporeans who are attracted to Iskandar

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SINGAPORE — Every weekday morning before the sun rises, Singaporean teacher Naharudin Shariff, 46, will leave his home in Nusajaya — about 20 minutes’ drive from Johor Baru’s city centre — and make his way across the Causeway to take his three daughters to different schools, before driving to work himself.

Come evening, he repeats the routine: After work, he will wait for his daughters — one of whom is studying in junior college, while the others are in secondary school — to finish their classes, pick them up, and head back to Malaysia. They try to reach home by 7pm and have dinner together.
“If one of my daughters has to attend an extra class in school, we all plan our day around that. Everyone tries to arrange their schedules so everyone does something that day. That way, we don’t have to make so many trips to and fro,” he said.

The daily shuttling between the two countries is a small inconvenience for a better quality of life in Johor, he said. “The whole family is happier (in Johor),” he told TODAY while at in his three-storey house in Horizon Hills, a gated community in Nusajaya. “Our house here is a lot bigger (compared with the condominium unit he used to own in Singapore). My wife can now have the spice garden she had always wanted and our kids keep a rabbit and a chick as pets.”

He added: “It is very quiet, especially at night. Very peaceful and relaxing. You don’t hear vehicles or the MRT. When you look out the window, you see trees instead of another concrete block.”

Like Mr Naharudin, Mdm Chin Yeok Tsui, 39, has been making the daily commute between Johor and Singapore. The housewife moved to Johor in 2012, after her husband got a job there. While she lamented about the hassle of having to wake up before 4am everyday to send her son to school in Singapore on time – if they do not reach the Causeway before 6am, they would stuck in a jam for up to two hours – she said that she will miss the slower pace of life in Johor when she and her family eventually move back to the Republic in a few years.

Her neighbours are more friendly to one another compared to the ones whom she had in Singapore, she said. In general, people are just “a lot friendlier and more relaxed” in Johor. “Because they look so relaxed, I also feel more relaxed,” she quipped.

Retiree Wayne Wong owns two properties in Johor  – the latest one he bought was a double-storey house in the Eco Botanic township in Nusajaya which is still under development. The 52-year-old splits his time between his Housing and Development Board flat in Woodlands and a condominium unit in East Ledang, a gated community in Nusajaya. Mr Wong said he bought his first property in Malaysia because he wanted to be “nearer to nature”. He also plans to grow a soursop tree on his second property, which comes with a garden space of more than 500 square feet.
“Singapore has become overbuilt and urbanised. Here, I can still get cheap and home-cooked local food at stalls and roadside vendors,” he added.

A trend reversal?

Over the years, many Malaysians have relocated to Singapore in search of better job opportunities and a higher standard of living, among other reasons. But like Mr Naharudin, Mdm Chin and Mr Wong, Singaporeans are moving in the opposite direction for a slower pace of life, lower cost of living and less congestion – factors that contribute to what they felt is a better quality of life.

Mr Naharudin and his wife bought their 3,000 sq ft, semi-detached house in 2010 for RM560,000. He had rented the place out, before uprooting his family about nine months ago to move to Malaysia because they wanted to “experience living in a landed property”. “When my wife and I bought the house, we already had plans to move to Johor eventually. At the time, there wasn’t so much hype among Singaporeans to buy property in Iskandar, but we saw the potential there,” he said, referring to the special economic zone spanning more than 2,000 sq km.

Citing the cost of his Johor house, he said: “For that amount, if we were to buy a house in Singapore, it would be less than 1,000 sq ft, and three times smaller.”

On the other perks of living in Johor, he added: “People are not always rushing about; they take the time to chit chat with you when you bump into each other outside the house. Things are also a lot cheaper here.”

There are downsides as well, not least the crime problem in Johor. For their safety, Mr Naharudin said his family stays indoors after dark. “We stay at home most nights, have dinner together, and maybe watch TV. We just don’t want to be at the wrong place and the wrong time.” he said.

Concerns over glut

With the high property prices in Singapore, residential developments in Iskandar have provided Singaporeans with attractive – and relatively low risk – options of owning and living in a luxury home with a fraction of the financial outlay that would be required to buy similar properties in the Republic. The risks for those looking to invest in the properties, however, are higher. Concerns are brewing over an oversupply of homes, particularly from the slew of mega developments by Chinese developers in the pipeline – a problem exacerbated by the dearth of housing data from the authorities.

Property developers in Iskandar are not required to disclose sales or rental updates.

Iskandar Malaysia, which is three times the size of Singapore, was launched as one of Malaysia’s five economic corridors in 2006. The project only took off after 2012, when several projects, including Educity, Puteri Harbour, Horizon Hills, and Asia’s first Legoland theme park, were completed.

The Iskandar Regional Development Authority (IRDA) – a statutory board established by the Malaysian government to oversee the zone’s development – releases regular updates on the level of investment. However, although long term targets have been declared – by 2025, 800,000 jobs will be created and the population will more than double to three million – figures on job creation or population growth are not available.

A Singaporean investor, who wished to be known only as Mr Lee, said: “There are too many mega developments, it’s very scary… The authority says there is demand, but what the real demand is, you cannot tell.”

The 42-year-old, who runs an investment holding company, has been buying properties in Johor for investment for the past five years. He currently owns about 10 residential and commercial properties. He noted that in the initial phases of Iskandar’s development, there was more information available, which allowed prospective investors to plan their purchases.

For example, Guangdong-based developer Country Garden, which launched 9,000 units in Danga Bay last year, is set to begin work on another 1,386ha of land at Forest City – a project which has been given the go-ahead by Malaysia’s Department of Environment amid concerns about the environment impact from some quarters in Malaysia, as well as the Singapore government.

Hong Kong-based developer Guangzhou R&F Properties, which is building the 3,224-unit R&F Princess Cove @ Tanjung Puteri, has bought 46.9ha of prime land at Tanjung Puteri Waterfront – an area that is twice the size of Country Garden’s Danga Bay project.

Singaporean investor Fabian So, 47, said the sheer number of units in the pipeline is a cause for concern. Mr So, a manager at a building products company, called on the Iskandar Regional Development Authority (IRDA) to intervene. “IRDA needs to make sure that supply and demand is balanced for these developments… but so far we have not heard of any catalytic factors (that could increase demand),” he said.

Agreeing, Mr Lee said: “I have not heard of any initiatives by IRDA to put the brakes on these (new developments). The market sentiment is that there is an oversupply, and then you have the IRDA saying, ‘Don’t worry, we have enough people coming in (to buy and invest)’.”

At a recent meeting with Singapore media, IRDA Senior Vice President of Strategic Communications Khaidzir Rasip said that Iskandar is an “open market”, and developers were expected to “do their own research, to ensure supply will match demand”.

He added that the influx of Chinese developers was unexpected. “We now have to work harder to bring in investment, to ensure that economic activities actually happen,” he said.

Several developers are aware of the threat of oversupply and are holding back their projects. Medini Iskandar Malaysia (MIMSB) – the master planner for Medini township, which is being developed as Nusajaya’s Central Business District – recently announced that it has stopped selling land for residential developments. “The last thing we want to do is to ‘cannibalise’ the market. Most of the developers who have bought land in Medini are developing residential properties,” said MIMSB managing director and chief executive officer Khairil Anwar Ahmad.

He was speaking at a media familiarisation trip to Iskandar, organised by Singapore-based developer Pacific Star.

Last month, Pacific Star announced the release of its 79 retail units and 56 Soho/loft units within Puteri Cove Residences & Quayside in Puteri Harbour in Nusajaya. All 400 residential units released previously in the mixed-use project have already been sold.

Some Singapore developers have reportedly held back their launches amid a subdued market.

Capitaland had clinched a high profile S$3.2 billion Danga Bay project in February 2013 with other consortium partners such as Temasek Holdings and Iskandar Waterfront Holdings. In September last year, the company said it was still waiting for the relevant regulatory approval for the project’s master plan. Property investment expert Ryan Khoo pointed out that the Singapore developers are committed to the Iskandar projects but they have to bid their time, and wait for the market to pick up again.

“The good thing is that a lot of the developers in Johor at this point are fairly financially strong. Even in a downturn, I doubt anyone will go bust as they all have holding power. Market conditions will improve once more infrastructure is up to improve connectivity and create more jobs,” he said.

‘Do extensive homework’

Seasoned investors and property experts cautioned Singaporeans from ploughing money into residential projects that are being developed in areas where there seem to be insufficient planning, and infrastructural and non-residential developments have not kept up.

Mr Lee said: “In Nusajaya, township planning is in place and in the long run, the overall prospects look good – unlike Danga Bay, where I don’t see the supporting industry (to create demand).”

Similarly, Mr So liked what he saw in Nusajaya. “A lot of business incentives, good infrastructure – all very meticulously planned… I was impressed by what was detailed in the master-plan in terms of ratio mix for land use,” he said.

Even so, those looking to be make a quick buck by flipping their Johor properties could be disappointed. “There’s still a lot of volatility and unpredictability, you can’t predict what will happen next – at the stroke of a pen, policies can change,” Mr Lee said.

For example, last year, the Malaysian government raised the minimum property price threshold for foreigners from RM500,000 to RM1million. In other words, foreigners can only buy properties that cost RM1 million or more.

But individual states have the right to decide when to implement the policy change. This was the second time the threshold has been raised in a span of five years. Before 2009, it was RM250,000.
Be it for occupation or investment, experts as well as Singaporeans who bought property in Iskandar advised those looking to buy a property across the Causeway to do a lot of research, such as finding out the track record of the developer, visiting the vicinity and understanding the development plans for the whole area, before they commit financially.

Mr Naharudin said: “My advice to potential home buyers is, come up here and take a look for yourself. Speak to those living in the areas if you can, about the condition of amenities and the security.”

Nevertheless, they noted that regardless of market conditions and the risks associated with overseas property investments, Singaporeans will always be drawn to properties in Iskandar. And over time, with better infrastructure and higher quality of the developments, the attraction will intensify.

After all, it is hard not to be enticed by cheaper and larger homes – especially for those with retirement in mind, Mr Khoo noted. “For some people, buying property in Johor is like a ‘semi insurance policy’, in case the cost of living in Singapore becomes too high. They think, why not buy now – then one day I can retire in a place facing the sea,” he said.

He added: “Regardless of the market conditions, there are always Singaporean investors going in, and developers – especially the big ones – have to up their standards to meet ‘Singapore standards’. In a couple of years, concerns over build quality will be a thing of the past.”

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