Sharing what I've learnt after talking to property advisers lately regarding the gloomy outlook of Iskandar properties:
On the map, and during coffeeshop talks, the travel from Singapore to JB sounds so near and convenient. But if you measure the time you leave your SG home to reach your destination in JB, you will realise it's not as convenient as it seems so.
"15 minutes from CIQ and you can reach Iskandar" -- This is a common advertising gimmick used by developers to attract buyers to buy their projects. But really...15 minutes? For many, it already takes some 20-30 minutes to drive from your home to CIQ. Being stuck in the queue during a jam and it's more added time needed.
Let's consider someone who takes the public transport:
If you don't live near the north or Tuas, you first need to take a bus from your home to say Woodlands. This journey alone could take say 30 minutes. Then you got to change bus. There is another waiting time of say 20 minutes. The journey to CIQ is about 30 minutes. Getting out of the bus, waiting to have passport stamped, getting back to the bus, jam at the causeway, all this could easily be another 40 minutes. Assuming the person then takes a cab to his Iskandar home, the journey is 15 minutes. So total time of travel from SG home to Iskandar home is 30+20+30+40+15= 135 minutes or more than 2 hours!
Even if you drive at NON-PEAK hours, safely I would say give yourself at least 1 hour. If peak hours, I don't know... 2 hours???
And then there is the journey back home at the end of the day to repeat the whole process.
I did ask around many people around me and so far, ALL have said they don't entertain the idea of living in Iskandar while working in SG. Those who are doing it now are likely retirees, housewives, bosses who don't have to reach Singapore on time. How many of us are in such a situation? Not many I suppose. I have a Malaysian friend who has to leave his JB home in the wee hours of the morning to beat the jam. It's tough.
The fallacious thinking of many Singaporeans is that when Iskandar becomes more vibrant, we will start to see Malaysians buying homes there and working in Singapore. Seriously, I have begun to have my doubts.
Firstly, current Iskandar homes are overpriced to many Malaysians. For those working here, they would rather rent HDB flats in Singapore and earn SGD to pay off the rent than buy expensive homes in Iskandar.
Some argue that Singapore companies will be attracted to relocate to Iskandar due to its lower costs of labour and land. Hence, many workers will want to buy or rent a home there. This is another fallacious thinking that is more or less confirmed to be untrue.
From the experiences of several companies which did that, they realised that while unskilled workers are available in JB, the productivity is a lot lower than in Singapore (due to the less competitive work culture of Malaysia compared to Singapore). Moreover, the traveling time from Iskandar to Singapore is not as fast as it seems on paper (see earlier paragraph). Also, Malaysians aren't stupid. Why would they want to work in JB and get paid so much less in RM when they could work in Singapore to earn higher pay in SGD?
The above has caused many companies to avoid moving to Iskandar to run their businesses.
As for the possibility of younger Singaporeans moving over to Iskandar in future due to the high property prices here, I don't think it will happen any time soon. By that, I don't foresee this happening in the next 10-15 years.
There are still many low priced HDB flats within the reach of young Singaporeans. Many 3 and 4-room HDB flats cost only S$200k to 300k+. Going forward 10 years later, even if you include inflation in the calculation, a 4 room HDB flat in Sengkang/Punggol at S$500k is still manageable to graduate couples. The convenience of visiting their parents and the need to feel safe in one's own country are too much to consider buying cheaper homes in Iskandar.
Then some say, wait a minute... didn't the SG government, so well-regarded for their foresight, also invested about S$1-2 billion in Iskandar? Are they wrong too? One property guy thinks this is only wayang. The investment was to improve the relationship between SG and Malaysia. Temasek GIC has some US$223 billion! That amount invested, even if they lose it, is not going to cause much pain. SG's investment overseas are known not to make money anyway! (Think Suzhou project, Vietnam,etc etc)
What about billionaire Peter Lim? Was he wrong too? Maybe not. But he is running a business, not buy properties in Iskandar. We got to differentiate between the 2. If he makes money in Iskandar, it doesn't imply home owners will!
Then those big attractions.... like Legoland, international schools, etc.... Surely they will draw the crowd? Maybe, but the number of such establishments and entertainment centres does not justify the number of properties. Anyway, why do you have to live in Iskandar just because there is a Legoland there? Are you going to visit it everyday?
I didn't consider all the above when I made my own purchase. :( It's after I attended talks by property advisers and sitting down to think more intelligently that I realise the outlook for Iskandar properties is indeed not as rosy as it looks.
Of course, some (like myself!) will self-console that they can keep their Iskandar homes for retirement or vacation. But it's a very expensive option to take. Based on past transactions in JB and the current worrying situation, it will likely make little difference whether you buy a property now or 20 years later; the price now could very well be the same decades down the road! You are actually losing money paying the high bank interest rates, depreciating RM, monthly service fees and lack of capital appreciation in the property. The money spent on such a property now could be better used for investments that can reap profits.
So I don't think this oversupply of properties in Iskandar will go away soon. It is especially a real problem for those who overcommit or buy solely for rental income.
A close friend and property agent even went so far as to advise that I should let go of the property now. It's painful losing the deposit and money paid thus far (S$50+k!!), but they think if it's solely for investment purpose, there will be a lot more pain and crying next time holding on to a property that bleeds the bank account. "There won't be any foreseeable tenants or buyers interested to buy over your property," they advised.
I'm just sharing without holding back what I have learnt over the last month and also how I feel. Feel free to voice your opinions so that others can also learn. Take away what is useful and openly discuss what you think are alternatives if they exist.