Property Bubble? No Kidding!

JB / Singapore map - note the two main entry pints into Malaysia ie the Second Link (bottom left, in red) and the Causeway (off centre) (source : iproperty.com.my)

JB / Singapore map – note the two main entry points into Malaysia ie the Second Link (bottom left, in red) and the Causeway (off centre) (source : iproperty.com.my)

In an article highlighted by the national mass media recently, there was a report stating that the Malaysian property market for the first quarter of 2014 had softened somewhat.

This softening of the market, which some property consultants termed as ‘a consolidation of the property market’, happens to be across the board with the residential, commercial, industrial, agricultural, development and ‘others’ sub-segments all affected.

It was worth noting that the report was released by the National Property Information Centre (NAPIC), a government agency whose data can be as accurate as ‘one can get about the state of the sector, down to how many transactions being done’, to quote the article.

The article further quoted the president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector as being not surprised by the findings of the report from NAPIC. He was further quoted as saying that the market is consolidating and that the market is not in a slump, which would otherwise be characterised by oversupply and declining prices.

Johor Bahru - a fast developing metropolis in the south of Peninsular Malaysia (source : iskandar malaysia)

Johor Bahru – a fast developing metropolis in the south of Peninsular Malaysia (source : iskandar malaysia)

As a member of the general public, the report from NAPIC could not have come at a better time. As many Johoreans will readily testify, the property market in Johor especially in Johor Bahru is a market that has gone off the rocks and is not a ‘Malaysian-friendly’ sector.

More and more properties especially condominiums are being built with prices exceeding the RM400,000 mark. This is way beyond what most Malaysians especially those who work and live in Johor Bahru can afford UNLESS you happen to be either a Malaysian working in Singapore and living in Johor Bahru OR a Singaporean who live in Johor Bahru and work in Singapore OR a Singaporean working and living in Singapore but dabble in the Malaysian property market, either for investment purposes or looking at making a quick buck.

It may sound harsh but should there be a property bubble developing in Johor Bahru and an impending burst of the bubble is imminent, it is doubtful that many Johoreans will feel sorry for the developers. Some may even rejoice when that happens.

It is common knowledge for Malaysians living in Johor Bahru that the property developers are not actually building homes for local ownership but rather for foreign ownership, foreign being defined as Singaporean. Trying to find a property that you can buy and call home may require lots of luck and even if you found one, it may be so out-of-town or so out-of-reach.

Johor Bahru at night (source : iskandar malaysia)

Johor Bahru at night (source : iskandar malaysia)

Some property developers unashamedly advertise their property development projects in Singapore Dollars and this when doing road shows in Johor Bahru. There is also another property project which places ‘a Certificate of Fitness’ or a ‘Certificate of Compliance’ from a Singapore agency in their show houses. Seriously folks?

Try to find a place to rent and it is most likely that you will have to dial a 02 or a 65 number. And even that the rental could be out of range for most folks. That is if the Singaporeans property owners are renting out the place.

Property agents in Singapore too are getting into the action. Go on a trip to Singapore and you will find property agents advertising properties not only in Singapore but also for locations in Malaysia further than Johor Bahru. You got admire these agents for expanding their market beyond their HDB flats. Reminds you of Phua Chu Kang’s punchline – Best in Singapore, best in JB and some say, best in Batam too. Couldn’t care much for Batam but JB?

Landed properties available. Looks nice until you see the price. (source : johor-bahru-real-estate.com)

Landed properties available. Looks nice until you see the price. (source : johor-bahru-real-estate.com)

The local banks too are not helping. It’s not like they are Singapore-owned banks. Go to a bank and tell them you are looking for financing to buy a property in Johor Bahru, they will ask for your place of work first. Depending on which side of the Causeway your place of work is, you will be either be given the runaround, with some openly discouraging or be welcomed with open arms.

This may sound petty to some, even unbelievable. But these are sentiments readily voiced by the locals in Johor Bahru and very soon, it will be heard elsewhere as well.

Hence, the proposal to amend the minimum price of properties that a non-Malaysian can buy in Johor, to RM1 million is very apt, providing the locals less competition from Singaporeans in their effort to buy property. It’s not the best solution but a solution for the time being nevertheless and will need reviewing on an annual basis.

In fact, the minimum price should be amended for the whole country, otherwise in looking at making a profit, property developers elsewhere would join their counterparts who are developing property in Johor especially in Johor Bahru, and develop property without a care in the world except for making obscene amounts of profit. In fact, it would not be surprising that envious looks are already been directed to the south of the Peninsular.

In other words, the authorities especially those WHO ARE SUPPOSED TO LOOK AFTER THE INTEREST OF MALAYSIANS IN HOUSING, will need to wake up from their slumber and get a grip on the situation, especially in Johor Bahru. It’s especially important as the locals are acutely aware of the situation, even if the authorities may not be.

Seriously, wake up please BEFORE it’s too late. PLEASE!

 

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