13 October 2013

Property Bubble in Iskandar Malaysia?

Year 2013 is the tipping point of Iskandar Malaysia development, as we have seen some of the major projects completed here: Legoland, Educity, Hello Kitty World etc and we also know that more well known developers venture here, such as Country Garden, Walker Corporation, Shangri La etc. 

I heard that the property price here have been surged rocket high, as RM300K property in Horizon Hill now can reach about RM1.0M and above. Of course, there are few reasons why we have seen a surge in property price here: 
  1. Support from Central Government - to create economic corridor along side Klang Valley, and Southern Johor has great advantage by just sitting aside Singapore, a logistic and financial hub. 
  2. Improvement of infrastructure spurred demand for foreign talents working in Singapore to travel in between Iskandar Malaysia and Singapore. They can even send their children to study in International School here with cheaper fees. 
  3. Increase in security level compared to few years ago. More gated & guarded communities are built up for those who demand for security enhancement. We now can see police control stations along major streets. 
  4. Increasing demand for Malaysian workers who cannot afford Singapore private property after Singapore government tightened the rules for foreigners & PRs to own a property here, especially introducing ABSD (additional buyer stamp duty. Some of them buying for future retirement or just simply for relatives or parents to stay while they can come and pay visit to those who are working in Singapore. 
  5. We also saw a great improvement in Bus services in Iskandar Malaysia, especially Causeway Link, a company which provides bus services in between Iskandar Malaysia and Singapore. Some may think that by year 2018 or later, we can see MRT linked to JB from Woodlands. It definitely can shorten the traveling time for a person to reach Singapore downtown from JB to within 1.5 hours, compared to 2.5 - 3.0 hours now. 
Nonetheless, if you look at the reasons above, then you may notice that none of the reasons are actually related to the economy boom in Iskandar Malaysia. In fact, Iskandar Malaysia currently rely heavily on Recreation & Education sectors to push up the property price. We still need a huge middle class to support retail business here. So far, I still cannot see Uniqlo / H&M setup a branch here. My wife complaints that there is nothing excited to shop here compared to Singapore. It is not really a good sign if we just rely on tourists / foreigners to boost up the economy here. In fact, I really hope more MNCs to setup a branch office here and it could be a backyard for Singapore. To me, I would call it The Greater Singapore (the area within 50 KM radar of Singapore downtown). Nonetheless, this is just my fat hope, as I know that the Singapore-Iskandar relationship may not be the same as Shenzhen - Hong Kong relationship as Singapore & Malaysia is just a country-country relationship and it relies more on long term political relationship between these two countries. 

As a citizen who grew up in JB and working now in Singapore, I sincerely hope that both area can prosper together. In long run.

1 comment:

  1. Hi Jack, It seem what you raise up is a Issue:) Just cross our hand and hope the transformation as promise by both the government will take place.
    http://www.urproperty.sg/2013/09/iskandar-malaysia.html

    ReplyDelete

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