Market sentiment bodes well for state that’s tagged as the next Klang Valley

By: Viktor Chong

Iskandar Malaysia five flagship zone. (Source: Iskandar Malaysia)

DESPITE a slowdown in the property market, property transactions in Johor increased by 11.56% -- second only to Selangor for having the highest number of transactions.

According to the National Property Information Centre (Napic), the overall volume of residential property transactions has dropped by 7% from Q1 2017 to Q1 2018. In Johor, residential properties below the RM500,000 mark dominated the sector with an increase of 616 units (13.21%) transacted.

Encouragingly, residential units valued at RM1,000,001 and above also enjoyed a boost of 45 units (31.91%) when comparing Q1 2017 and Q1 2018.

All property sectors in Johor projected positive take-up rates with the exemption of industrial developments, which declined by 13.1%.

At the Malaysian Institute of Estate Agents (MIEA) Property Market Sentiment report launched earlier this year, Johor chairman Liew Toh Sen expressed optimism when he said the property market will pick up from 2018 onwards because it is supported by domestic demand. He added that units ranging from RM400,000 to RM700,000 will be popular.

Iskandar Malaysia: Without a doubt, Iskandar Malaysia -- which spans 2,217sq km (three times the size of Singapore) -- is the most happening place in Johor, with major developers having a stake in the area. Among Iskandar Malaysia’s most prominent feature is its direct access to Singapore, with over 50,000 people commuting daily from Johor Baru for work and educational purposes in the city-state.

Iskandar Malaysia and Singapore are collectively inhabited by over six million people, with four maritime ports, two airports and various overland links between them. Located at the crossroads of the important East-West trade routes, Iskandar Malaysia is situated in the middle of the region’s two economic powerhouses, China and India, and it can be easily accessed by air, land and sea.

Funding from the government Under the Ninth Malaysia Plan (2006-2010), the federal government allocated RM6.83bil for projects to be undertaken in Iskandar Malaysia. Seven projects worth RM1.45bil were road packages with another seven being drainage projects worth RM76.52mil. Four other projects worth RM89.60mil were for river cleaning.

The river-cleaning effort alone costs RM103.6mil, while RM144.9mil was spent on 11 urban drainage projects.

Substantial attention was given to the relocation of squatters -- a total of 3,652 families (2,932 in Sungai Tebrau and 720 in Sungai Skudai) were moved to better areas that offered improved living standards.

The relocation has the added benefit of reducing socio-economic problems and lowering the degree of water pollution, with proper drainage and solid waste disposal systems.

About RM203mil had been spent on the Sungai Tebrau squatter relocation effort, while RM205.7mil went to the construction of affordable rental housing for the lower-income group under the Rumah Iskandar Malaysia initiative.

A sum of RM11.4mil was invested in the creation of 26 Bas Iskandar Malaysia routes as well as the installation or refurbishment of supporting infrastructure such as bus stops and bus poles.

A ready workforce

Drawing from a local population of two million, the talent pool is young, skilled and well-educated. The majority of the workforce has industry
experience (finance, oil and gas, manufacturing and logistics) and are bilingual (Bahasa Malaysia and English).

According to the 10-year report by Iskandar Malaysia, Johor produces over 17,000 bachelor degree-holders yearly. Over 50,000 students are enrolled at higher learning centres in Johor, with the inception of Educity adding 16,000 more.

The development growth of industrial zones in Flagship C and D augurs well for future job opportunities. The second link bridge gives Johor residents access to the Singapore job market while enjoying the Malaysian standard of living.

Over a 20-year period until 2025, the region is expected to record gross domestic product growth of 8% per annum, resulting in nominal GDP of USD93.3bil in 2025 and GDP per capita of USD31,100.

A total of 1.43 million jobs will be created for a population that is expected to reach three million in 2025.

Investors keen on Iskandar

From 2016 to June 2017, Iskandar Malaysia secured a total cumulative committed investment of RM237.36bil of which RM130.55bil (55%) has been realised on the ground. Property and manufacturing sectors remain the main contributors of this committed investment.

The top foreign investment was from China totalling RM26.51bil, followed by Singapore (RM20.87bil) and US (RM6.79bil). China’s investments in Iskandar Malaysia are mainly in the property development sector which saw the inception of listed Chinese development companies such as Country
Garden, Greenland and R&F Properties undertaking massive waterfront development projects.

Due to its proximity to Singapore, Iskandar Malaysia is the most successful of the five economic corridors in Malaysia.

It has targeted to reach a total investment value of RM383bil by 2025.

With Johor slowly becoming the next Klang Valley, StarProperty.my Awards: Jewels of Johor is here to pay homage to real estate developers that have contributed to the industry’s growth.

Back for the second time this year, the awards aim to create a greater awareness of the property landscape in Johor. It is also designed to enhance the brand value of the state’s players by highlighting their outstanding projects.

Last year’s gems included EcoWorld Development Bhd, Gamuda Land, Country Garden Danga Bay Sdn Bhd, Ipark Development Sdn Bhd and UMLand Bhd.

Visit bit.ly/JohorJewels2018 for more details.