The Big Read: Johor property market remains hot, but Singapore buyers have their work cut out in making the right investmentThe Big Read: Johor property market remains hot, but Singapore buyers have their work cut out in making the right investment
Ms Hung said she had wanted to move out of her parents' house as she needed her own quiet space, which she felt would help her better focus at work. Ms Hung took out a bank loan to finance her 1,237 sq ft abode, which cost around RM700,000 . She currently pays about RM3,500 a month for the mortgage and maintenance fees.
Even so, buying property in Johor was all the hype among Singaporeans about a decade ago, when Iskandar Malaysia, the main southern economic corridor in Johor, opened for business. Each unit of four bedrooms and six bathrooms was financed with a bank loan after a 10 per cent down payment. Three more factors threw Mr Sim's plans out of kilter: The onslaught of new projects raised supply above demand, the 2018 Malaysian general election culminated in a change in government and policies, such as the cancellation of the HSR project and lastly, the ringgit continued to weaken against the Singapore dollar.
But real estate experts told TODAY that rising inflation and property prices at home are the more important reasons driving Singaporean homebuyers up north. Last year, Forest City, the flagship US$100 billion mega-project by Chinese developer Country Garden, was dubbed a"ghost town" by the media as the housing estates there were reportedly largely unoccupied.
TODAY examines the reasons behind the current influx of Singaporean buyers in Johor, what they look for in a Johor property and the key things one should consider before putting money down on a house across the border. The launch of Iskandar was aimed at attracting international investments that would drive economic growth for the state. And within Iskandar is the township development of Medini, envisioned as Iskandar Puteri's central business district . Here, there are no restrictions on foreign home ownership.
Despite its ambitious vision, the project encountered several challenges and controversies due to a mix of low sales, Chinese restrictions on capital outflows, border closures during the pandemic and public backlash against China's increasing influence in Malaysia. In an attempt to spur economic development and attract investors, Forest City was announced as a Special Financial Zone last August. With this designation, businesses are offered incentives to set up operations here, such as a flat income tax rate of 15 per cent instead of the usual 30 per cent, for skilled foreign workers.
For a place where supposedly 9,000 residents are staying, this reporter found it unusually quiet for a weekend. On Mr Tan's floor, where there are eight units, he said only his was occupied. He said that the rate at Forest City was cheaper compared with units for rent in nearby towns in Iskandar Puteri, such as Gelang Patah:"For the same unit, I'd be paying RM1,600 there."
"R&F is near my workplace in Admiralty West. You can see it from my balcony. So geographically, I'm at an advantage," he said. "We decided to look to JB and thought, instead of renting, why don't we put our money into a place we can call our own?" he said. For the last six months, he has been renting a 1,500 sq ft double-storey terrace house in Horizon Hills, Iskandar Puteri, with his wife and two kids, aged six and nine, for RM3,500 a month, and he likes the lifestyle there.
The difference in cost of living was another push factor, as Mr Afiq is currently spending S$20,000 a year on his kids' education. If he were to do the same in Singapore, he estimated that he would easily be paying twice or thrice that amount. "But that's why staying in a gated community helps. My family and I are also not flashy people. I own a cheap entry-level local car so that we can get around easily. We try to avoid unsafe areas."HIGH HOPES DASHED BY MARKET REALITIES AND POLITICAL SHIFTS
"The Johor property market was booming, so my friends also bought properties in Johor as investments. I expected to be able to sell my house within five years and make a profit due to capital appreciation," said the 40-year-old.