07 June 2013

Iskandar Malaysia - Will Johor Government Impose More Restriction on Property Investment?

Iskandar Malaysia is a flagship project initiated by Malaysia Government since Year 2006. We see a tipping point when the main road infrastructure and some of the leisure projects was implemented last year, such as Johor Premium Outlet, Coastal Highway, EDL and Legoland etc. With more theme parks coming in to this region, I believe it would be a very important station for tourists to come and travel in South East Asia. Although Senai Airport is still under utilized, but I believe it could further improve the passenger volume in Changi Airport, as I observe that there are increasing amount of tourists crossing the causeway to / from Singapore, especially during school holidays or summer/winter holidays.

With 130,000 foreigner buyers in Iskandar Malaysia, 90% of them are Singaporean. Recently the new CM of Johore announced that the government may impose higher tax to foreigners due to increasing demand that drive up the property price which locals could not afford to buy. It is a trend for Malaysian who work in Singapore to buy a house in JB after so many attempts done by Singapore government to curb the speculation in Singapore property market.

Malaysian Friends around me also feedback that they can understand why Singapore government try to protect its citizen by implementing Additional Buy Stamp Duty (ABSD) for Singapore PRs first time buying property in Singapore. However, they also hope that the infrastructure in Iskandar Malaysia could improve further so that the traveling time could be reduce significantly.

The traveling hour now from JB Custom to Kranji / Woodlands MRT station is around 1-1.5 hour during peak hour. And it may take about 1 hour from Kranji/Woodlands to CBD area in Singapore. With MRT further improved in Singapore and JB by year 2020, I believe the traveling hours can be further improved by 50%. It may bring new interests for those who wish to stay in JB while working in Singapore. I believe minority of Singaporean may move to JB while renting out their properties in Singapore to create another income stream for them.

Anyway, let's see what would happen. Maybe this time Iskandar Malaysia can be "Shen Zhen" to Singapore, where labor-incentive industry could move to this area and Singapore can further strengthen its leadership as global logistic hub & financial hub. And definitely Johor Government must do something to reduce the tension among locals who complaint about the rising property price (and hence the inflation rate) there.

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