The Straits Times | Mar 17, 2013
Agents see stronger buyer interest, rising capital values in Malaysia's economic corridor
Kuala Lumpur - The last six months have seen a tremendous spike in property prices in Iskandar Malaysia, one of the country's most successful economic corridors, with interest and imagination fired by warming of government ties between Singapore and Malaysia and the completion of several infrastructure projects.
While property agents from both sides of the Causeway say they have never seen such a steep climb in interest in the last two years, it is the last six months that have taken their breath away. Everything, from price to interest from foreigners, has been strastospheric.
How much of this is hype and how much of it is for real?
Although there have been occasions when agents have been "overly optimistic" and exaggerated sales numbers, Jones Lang LaSalle head of residential project sales David Neubronner says they are seeing more enquiries in recent months, stronger buying interest and rising capital values.
Show houses and apartments in Iskandar are busy even on weekdays. Good Malaysian property launches in Singapore draw in full houses, says the Singapore-based Mr Neubronner.
Robust demand is evident at popular developments such as Senibong Cove and Straits View Residences where both have sold out all their previously released landed properties.
On the residential front, Nusajaya is hogging the limelight with its slew of initiatives and developments coming on board. Of particular interest, says Mr Neubronner, is the Puteri Harbour scheme which boasts luxury waterfront villas, apartments, serviced residences, hotels and commercial developments.
Other attractions include the new international schools in Nusajaya, like the world-renowned Marlborough College. This has caught the attention of the expatriate community in Singapore and many are making enquiries, says Mr Neubronner.
Other hot areas are waterfront homes in Danga Bay and Permas Jaya.
CB Richard Ellis (Johor) director Wee Soon Chit compares today's prices with last June's and as far back as 2006, when Iskandar was first launched.
Today, vacant bungalow lots in Ledang Heights are priced at between RM100 and RM120 (S$40 and S$48) per sq ft. Last June, they were RM60 to RM80 per sq ft; in 2006, they were RM25 to RM30 per sq ft.
"There seems to be very strong interest and an element of speculation," says Mr Wee, adding that he has never seen such a dizzying spike in his 17 years in the property market. "Property prices were rather stagnant from 1998 to around 2006."
As for the industrial sector of the market, prices at the UEM Group's Southern Industrial Logistics cluster in Nusajaya were hovering at RM25 per sq ft in 2006. By last June, they had doubled to between RM40 and RM50 per sq ft and today, lots are transacting at prices as high as RM75 per sq ft, said Mr Wee.
As for commercial land in Johor Baru, known as the old town, Mr Wee says the latest transaction for a yet-to-be-converted parcel fronting Jalan Abdullah Tahir was RM380 per sq ft.
In Nusajaya, at least 60 per cent of buyers of residential properties are foreigners compared with 40 per cent in Johor Baru. Prices of high-rise units launched in 2006-07 have moved from RM350 psf then to RM1,200 psf now.
Mr Wee says it is not really "an apple to apple comparison" because they are now seeing better finishes and designs.
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