WHAT comes to mind when someone says he is looking for an affordably-priced house in Johor?
At the moment, “half a million ringgit” is “affordably-priced” if you are living in Johor Baru.
But how many people can afford a RM500,000 house? Will banks approve the loan application of a young executive? Even with combined income, a couple may not have much left for to save for retirement and their children’s education.
KGV International Property Consultants executive director Samuel Tan said there was clearly a mismatch between the earning power of locals and what was out there in the property market.
“Property developers are changing their plans in the next two years. They have to sell the houses they are building and at the same time, try to match local folk’s definition of affordability.
“In Johor Baru, a condominium may cost between RM400 and RM900 per sq ft. A unit that is 900 sq ft is still deemed affordable, but it may be difficult to get financing for a bigger unit.
“Bank Negara Malaysia has to pare down household debt in Malaysia, and this is one way to do it (stricter lending guidelines),” said Tan.
On another matter, Tan does not think China’s capital control measures are for the long term.
“No government will permit capital flight, so it will try to curb excessive money leaving the country. When this has been achieved, the capital controls will be lifted. So I see it only as a short- to mid-term measure.”
JOHOR MARKET SLOWDOWN
The Johor property market is experiencing a slowdown with no new launches, especially for houses priced above RM800,000.
Real Estate and Housing Developers’ Association Malaysia Johor chairman Datuk Steve Chong Yoon On said potential house buyers were being cautious.
“They are generally not interested in buying high-rise units or houses with ‘high-end’ price tags. Many buyers are adopting a wait-and-see attitude now.”
He also said there was no property glut in Johor, only a slowdown.
“This trend could be seen in the past 10 years. People will just not buy houses with exorbitant prices (RM800,000 and above).
“But landed properties between RM300,000 and RM700,000 are still being snapped up,” he said.
Chong said the slowdown was due to stringent financing measures imposed by banks.
“Out of 10 housing loan applications for a house priced above RM800,000, five can be rejected if the financial standing of the applicant is not stable,” he said.
PROMISING PROJECTS TO SUPPORT GROWTH
Johor has promising projects such as the Kuala Lumpur-Singapore high-speed rail, the Rapid Transit System between Johor Baru and Singapore and the link with Singapore’s Mass Rapid Transit system.
Chong said these would attract house buyers to properties in the south of Johor.
Tunku Mahkota Johor Tunku Ismail Sultan Ibrahim said last December the population of Johor, currently at 1.7 million, was expected to increase to three million in 2025.
Based on the estimated population growth, the state needs 660,000 housing units by then.
At the launch of a new affordable housing scheme spearheaded by Sultan of Johor Sultan Ibrahim Sultan Iskandar recently, an overwhelming crowd of applicants turned up.
Costing less than RM100,000, this scheme will comprise either bungalows or semi-detached houses built without fences to develop the community spirit, expressed by the sultan as ‘silaturrahim’ (kinship).
The houses will be made available to all qualified Bangsa Johor residents.
PRICES MAY FALL ACROSS THE BOARD
Amid the rapid development in Johor and across the Causeway, there is a slow and gradual drop in house prices.
The affordable houses that Sultan Ibrahim plans to build for his subjects will put further pressure on house prices.
Seri Alam Properties Sdn Bhd senior general manager for township division Frankie Tan Kiat How also believes there is a slowdown in the high-end housing market, and this had caused rental to drop.
“Rental for a semi-furnished unit at Danga View Apartment in Johor Baru was RM2,500 last year, but the same unit is going for RM1,500 this year.”