Property in Johor

[Wt_know]

msia ... buy property in KL and Penang ... risk of fcked up is lower. JB ... must really really get the "right spot"

[HP_Lee]

Ultimately, on e have to do ground work there to understand the implications and exit strategies. That is why many still stick to Singapore as a easy way out to invest. If one call it as an investment, mean one is looking for much higher returns compare to our CPF SA. If one invest below that returns, what the point. Just because it is in Singapore. If our realize, we are heading toward what Japan is of today. Is a nice country with 4 seasons. For 3 decades, population have not been able to grow and we see greying day by day. Do you think this greying population will buy more properties ? 

 

Back to Singapore. Yes, many said land scare, Don't worry. It will fill up in no time. Price will escalate sooner or later. Before one decides , understand the what is happening outside of us. These points are well known to public. I just summarized here :

 

1. Recently, China seem to be alienating us.

2. OBOR created by the Chinese, is going to economically affecting us in many fronts.

3. The change of the world Order, US policies is unclear and retreating on US, China is stepping up to fill the void.

4. Our Port use to be a strategic point of business follow between the East and West. But things are starting to happen from the North(China and northern SEA).

5. China include HSR development, in Malaysia. That is stopped at KL. We are excluded.

6. IA Automation, as mentioned. This is going to remove many jobs. In turn we do not need many foreigners and also our own workers. It is gaining traction here and the development is getting faster.

7. Many businessman, like have understood the benefits of running operations across the causeway. (This is our third year, since shifted operations in JB)    

8. Foxccon, the largest contracting manufacturing that builds iPhone, is now working with US to build a fully automated plants that product iPhones at a slightly higher. They are going for big impact to Asia supply chain. It is unknown, how many jobs are going to US. 

9. Our TFR rate is at 1.2. Which is below the replacing level of 2.1 for many years. This will need more imported foreigners to become new citizens to cover the shortfall. Which is not happening.

10. It is a known fact that Singaporeans love to have second home. That include me. But, many bought second home and hope to rent out. So if majority are doing the recently, what is the competition like ,forward? That is why the rental market is still trending down, even the mass market started warmed up. This was due to to the slight change in policy. But not a signal of a good market.

 

Naturally, people used the pass decades of data and extrapolate into future. Thinking that the local property will only goes up in time. We are looking alike Japan, where other Asian countries are growing strong during developing stage. This had happened to us between 1970s - 1990s.

[Windwaver]

Japan is a good example.

 

Actually many do not realize Japanese properties are cheaper than ours

[HP_Lee]

Cheap does not mean good. There is always cheap for a reason. It is They are having economy structural issue that is stagnant or deteriorating. Most money will earned from overseas, by the MNCs. Another good example of greying society.  I would not venture into such country. Unless the gov, open the flood gates, which I think Japanese will not willing to do it in a big way.

 

We are heading to that as a greying society. We need more imported new citizens and foreigners. But again, majority do not like that idea. 

 

 

Japan is a good example.

 

Actually many do not realize Japanese properties are cheaper than ours

 

Edited June 2, 2017 by HP_Lee

[Sdf4786k]

Iskandar and Forest City will be a failure

 

I look forward to living there. One whole

 

tower maybe a few occupied only. I don't mind

 

surrounded by empty apartments. Less noise. 

 

when come to sell also the same.. 

 

Its like those SERS flat being demolished. The remaining few will have drug users breaking in on those empty flats...

[HP_Lee]

Bro, my advice is not to touch this development. Be-careful of township selling in JB.  What I heard of, almost everyone is a investor of the project. If no one actual stays there, how the retails going to sustain? Eventually, one by one closes and that will deeper impact the market value of those invested there. Think about it. I'm wary about such.

 

 

Iskandar and Forest City will be a failure

 

I look forward to living there. One whole

 

tower maybe a few occupied only. I don't mind

 

surrounded by empty apartments. Less noise. 

 

 

[Windwaver]

Cheap does not mean good. There is always cheap for a reason. It is They are having economy structural issue that is stagnant or deteriorating. Most money will earned from overseas, by the MNCs. Another good example of greying society.  I would not venture into such country. Unless the gov, open the flood gates, which I think Japanese will not willing to do it in a big way.

 

We are heading to that as a greying society. We need more imported new citizens and foreigners. But again, majority do not like that idea. 

 

That's why I brought up Japan.

 

I thought majority loves that? The last time our current administration won more than 70% of the votes

[Zxcvb]

https://www.bloomberg.com/news/features/2017-06-22/the-100-billion-city-next-to-singapore-has-a-big-china-problem

 

Bloomberg always spread fear. Have confidence in Sultan of Johor and Najib!!!!

[Kb27]

Personally, just a feeling..

I don't think Iskandar will come out good, esp since the PRCs are involved.

If you're looking to invest, it's probably the wrong place.

 

Who can buy your property ? I don't think the locals would, when they can pay probably half the price of what you're paying now.

 

You need new blood (fools), new money to come in.

If the PRC money stopped coming in, then you'll be looking at a dim future.

[Jamesc]

Cheap does not mean good. There is always cheap for a reason. It is They are having economy structural issue that is stagnant or deteriorating. Most money will earned from overseas, by the MNCs. Another good example of greying society.  I would not venture into such country. Unless the gov, open the flood gates, which I think Japanese will not willing to do it in a big way.

 

We are heading to that as a greying society. We need more imported new citizens and foreigners. But again, majority do not like that idea. 

 

Its not majority don't like foreigners,

 

we like foreigners like young ladies

 

from Japan and Korea and Taiwan

 

from the best universities, The best

 

and brightest and most beautiful like

 

AKB48 and SNSD.

 

 

 

 

[HP_Lee]

I do like that too. But always comes in a baggage of unwanted.

Its not majority don't like foreigners,

 

we like foreigners like young ladies

 

from Japan and Korea and Taiwan

 

from the best universities, The best

 

and brightest and most beautiful like

 

AKB48 and SNSD.

 

 

 

 

 

[HP_Lee]

This is probably what one get in Singapore. I would rather invest somewhere else. 

 

http://dollarsandsense.sg/property-investing-in-singapore-are-you-really-making-money/

 

IT is getting tougher in Singapore property market. Unless for speculators looking of shorter term to flip. In longer term , one may get below 2% annualized. Why not put in CPF and safe all that trouble?? Simple Math.

[Mkl22]

This is probably what one get in Singapore. I would rather invest somewhere else.

 

http://dollarsandsense.sg/property-investing-in-singapore-are-you-really-making-money/

 

IT is getting tougher in Singapore property market. Unless for speculators looking of shorter term to flip. In longer term , one may get below 2% annualized. Why not put in CPF and safe all that trouble?? Simple Math.

Maybe cpf will pok too.. if that happens, singapore is in deep shit.

[HP_Lee]

If this got to happen, the whole market will tank. If one leverage , it will worst of. Banks coming after....

 

At least if CPF tanked, that is so much one lost.

Maybe cpf will pok too.. if that happens, singapore is in deep shit.

 

[avoocc]

msia ... buy property in KL and Penang ... risk of fcked up is lower. JB ... must really really get the "right spot"

 

 

I have 2 friends whom bought in Penang, they cant rent out. It did appreciate in value but on paper only ...no income and have to pay maintenance monthly. .

 JB ... must really really get the "right spot"

 

Care to share which Spot , thank you

[avoocc]

The be fair to Malaysian properties, I had made 3.5x money when I sold a property in JB, in 2014, after selling Singapore property in 2011. Whereas, Singapore I made only 2.1x. Than bought one in Australia in 2015 end , after the property bust, there.

 

Coming from middle ground, every country have it's pros and cons. Depending on what one needs. Even today, Malaysia also have it's pros. Because worst situation is priced near. Whereas Singapore, the prices are still inflated, due to it's stable rating. Therefore, one have to pay premium to this market and accept low yields.

 

If everyone says, Malaysian properties are no good. It is priced for the worst. There are gems around. One just have to know the place well. My factories are in JB, and goes in often. In fact the place have change alot. Those who seldom interact with the locals, and just head from news in Singapore, may lost opportunities.

 

 

Can you share some gems in JB

[Cook123]

Security there is main concern imo

House food might be cheap n nice but if not safe what else matters?

Just my 2c

[Staff69]

 

 

Iskandar Malaysia Property Investments – 5 Reasons Why They’re a Bad Idea

 

By aaron loy

January 3, 2015

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Image Source: http://www.iskandarmalaysia.com.my/our-development-plan

A few months back, I entertained the thought of buying a property in Iskandar Malaysia, either as a home for myself, or as a rental property. The relatively weak Malaysian Ringgit makes it a very enticing proposition, but while personal factors (like location of friends, lack of personal transport and poor internet infrastructure) ruled out my using the property as a home, I also quickly realized that it’s also a very bad idea to buy one as an investment.

Now, I don’t pretend to be an expert in property investmenting, but what I do have however, are insights as the son of a real estate agent, and my penchant for (overly?) anal-analytical thinking.

So why is investing in Properties in Iskandar Malaysia currently a bad idea? Here are some of my reasons:

 

1. Limits on Foreigners

There are 2 parts to this.

The 1st one, which is arguably superficial, is that in every project, certain units are always reserved for the local Malay populace. There are informally called ‘Bumi Units’, named after the ‘Bumiputera‘, the policy. You can read more about it here.

In practice, you’ll find that some of the best units will not be available for purchase because you’re not a local Malay. An annoyance for those buying for yourselves, though probably not as big of an issue if you’re planning to rent the place (There are of course loopholes to get around the problem, but we’ll focus on the ‘official’ stuff only, yea?).

The most important thing though, is that foreigners are only allowed to buy property above a certain limit. It was RM500,000, and as of 3rd March’14, it has been raised to RM1,000,000.

Understandably, this is to prevent rapid rise in prices due to over-speculation, which is a good thing for the locals. As an investor however, this will be a problem for your exit strategy, which we’ll talk about later.

 

2. Are Businesses Moving In? Who are your Tenants?

Iskandar Malaysia is being sold as a holistic nirvana where anybody can work, play, and live a balanced life.

Be that as it may, there’s 1 fundamental a lot of new investors miss when they’re considering an investment here; Are businesses moving in?

Think about it. In any new town, businesses must set up shop first before the people (employees of these businesses) move in. I’m not sure that’s the case with this region.

The next time you bring yourself and/or your family along to Johor for your shopping and seafood, keep your eyes open and pay attention to the commercial spaces. Are the shops doing well? Are their customers mostly locals or weekender Singaporeans? Where are the offices, warehouses and other non-retail spaces? Are they filled or mostly empty? etc.

This is important information because you need to figure out who’s going to rent your property and if there’s demand. From what I see so far, demand from local business staff is extremely low.

The other side of this argument is that because of the increasing cost of living in Singapore, more people will starting living cross-causeway livelihoods, working in Singapore while staying in Johor. A valid point, I concede, but honestly, when will the demand start to rise?

How many are willing to spend the extra time, at least twice a day, 5 times a week, enduring traffic jams going to and fro work via the check points? Until Singapore and Malaysia stop bickering and solve this fundamental logistical issue can large scale cross-causeway livelihoods become a reality. This, and the recent measures to (finally) increase supply of houses in Singapore, means that most people will still opt to stay here.

So, who’s going to rent your property?

 

3. Competition Against Other Investors

I shall attempt to figure out why you’re thinking of investing in Iskandar Malaysia with the help of my crystal ball… let’s see now…. mmmm……. ahhh… I see…:

1. You’re new to property investing

2. Malaysia is still ‘familiar’ territory compared to, say, the Philippines or Vietnam

3. Properties in Malaysia are much cheaper than those in Singapore (2.5x cheaper sial!)

4. No Money Down (It seems like the Malaysian government is cracking down on this loophole though)

…. close?

Hey, don’t take it personally. Knowing yourself is half the battle won yes? I’m in the same boat as you =)

With that done… do you see a problem?

We’ve already established that rental demand isn’t exactly hot in that area right now, yes? And yet, it seems like housing in Iskandar is (or was?) selling quite well, and I suspect, to those with the same mindset as you and me.

So, not only do we have questionable demand, but we also seem to have an oversupply of new wannabe ‘investors’ trying to rent as well, which means there will be a large supply of rental properties in the market, and a large supple would mean lower rentals and a lower return on investment, isn’t it?

Mmmm… Singapore Dollars looking Delicious

4. Cheap Investment?

One of my pet peeves is that the word ‘cheap’ is often misused. It’s often used to denote ‘low priced’ when it should mean ‘low for its price’ instead. Let’s put it this way, buying a $1,000,000 sports car that costs $2,000,000 to make is ‘cheap’, while $7.90 for the same nail clipper that can be bought for $2 at a pasar malam (night market) is called ‘expensive’. Price ≠ Actual Value.

Anyway…

A similar problem plagues the mindset of the wannabe investors who are exploring the possibility of investing in Iskandarian properties; They (or We, I should say) feel that these projects are ‘cheap’ because they’re ‘cheaper’ than properties in Singapore.

In my opinion, Iskandar Malaysia is, especially their residential projects, in effect, like Batam Island, in that they’re made to cater to Singaporean cash cows who are willing to be milked. In other words, most of it is hype, with inflated prices and an excess of fake demand.

 

5. Exit Strategy?

Let’s say, for whatever reason, the time has come for you to sell this property of yours. Now, before we talk about making or losing money, let’s talk about the 2 primary factors that will effect your ability to do so:

The RM1,000,000 lower purchase limit on foreigners, and the fact that most properties launched are priced between RM500,000 and RM1,000,000.

Oops.

You have to remember that these projects are not made to be affordable for the locals; They’re there to maximize profits from foreigners (read: Singaporeans) with cash to spare. So, unless the government lowers the limit or there’s a miracle spike in property prices, the limit effectively eliminates all foreigners as potential buyers for your property.

How can you sell.. when there are no buyers?

 

Conclusion

1. Limits on foreigners that limits choices.

2. A practically non-existent rental market.

3. Competing against a large pool of ‘investors’ for a small pool of tenants.

4. Bad value for money.

5. Effectively, no way out of this investment.

Honestly, all one needs to do is to ask some simple questions and do a little research to know that investing in Iskandar Malaysian properties is, at best, a questionable move to make. There are too many things working against you and expecting any of those factors to change is almost akin to gambling, hoping for a good card to appear.

Investing may be a game, but it’s a game you want to win by making informed choices.

There’s a word for taking chances and hoping for the best: Gambling.

At the moment, in my humble opinion, the local government and the property developers made a killing while the ultimate losers are those who bought units before the limit increased to RM1,000,000. These people are stuck with a property that’s extremely difficult sell or rent to break even, much less make a profit out of.

Here’s the thing though; There IS a potential for that place. After all, with the cost of living in Singapore on the rise and its government’s penchant for taking short-cuts to solve its population problem, an increasing number of people will consider staying around Iskandar Malaysia as a permanent compromise between convenience and lower cost of living.

That being said, I believe that the potential will only be realised in the relatively far future, and things will only get much worst before it becomes a viable investment option.

I hope this ‘layman’s’ take on the subject has given some insight into the topic. Remember to share this post, especially with those who are considering a purchase in the area.

Do check out another take on the same topic @ Dr Wealth: Iskandar Malaysia is Only Going One Way – Down. Research is always important, yes?

 

http://www.theaaronloy.com/iskandar-malaysia-property-investments-5-reasons-why-theyre-a-bad-idea/