Iskandar -- Now is the time to invest in or it's overhyped?

[shctaw]

Thanks for your compliment, but I'm really no expert.

I'm just like many forumers here who earns an honest salary, and have saved enough to buy a property or two across the causeway.

So do you agree with me any rental return forecast are all not realistic. Hence I never think about rental return.

 

[sgcount]

In JB right now, the newer developments tend to be not quite close to amenities. Unless we consider the older resale homes. But these days, people would rather pay more to get newer condos, from my observation. Kind of like speculation something big will come up there in time to come. That's largely my fear too. Cos for new buyers now, in say 5-10 years' time, their condos or houses will be considered old themselves and the cycle continues. With Iskandar building more properties, will there be an attraction to buy the older ones? At best, maybe some tenants will be interested to rent there but to sell them off, it could be impossible. And one could be stuck with that property for a very long time.

What you're doing now is a great idea which I know some Singaporeans do. That's the best cos in Singapore, I think it's easier to find tenants, and you get higher rental in S$ while your Malaysian house is so much cheaper to maintain. But for me, I am a lot more comfortable to be based in Singapore because I can't cope with the long travel everyday across the checkpoint. It's a lot tougher in that sense as far as investment is concerned.

IMHO if you want to invest then find those that are very central to amenities. Rental outlook not so good so maybe likelihood would be to resell to fellow Singaporeans or foreigners (some would say "the next sucker") after holding for a few years and value has gone up by a few hundred thousands.

For me, my story is that buying a bigger HDB is too prohibitive; started looking for HDBs in March but found resale too expensive, BTO must pay levy and wait long long, ballot for BFS also rejected. So we just decided in June this year buy freehold landed for own-stay at price of a 3 room HDB flat and rent out HDB after property agents persuaded me not to sell off my HDB entitlement. Now hoping to get my keys in a couple of weeks' time.

 

[FHBH12]

I cruched other statistics. The conclusion is insufficient landed to meet the demands of locals. The problem only surfaced last year because there was a gross mis-match. Any sub $600k RM landed will be snapped up quite fast, especially if they r new n above 2000 sqft in good locations. With land n construction costs going up, it is quite safe to say landed will hold value. Condos r highly dependent on location. But I believe e actual supply will be lower, because contractors will be fighting for resources to build.

 

[Frodo]

In JB right now, the newer developments tend to be not quite close to amenities. Unless we consider the older resale homes. But these days, people would rather pay more to get newer condos, from my observation. Kind of like speculation something big will come up there in time to come. That's largely my fear too. Cos for new buyers now, in say 5-10 years' time, their condos or houses will be considered old themselves and the cycle continues. With Iskandar building more properties, will there be an attraction to buy the older ones? At best, maybe some tenants will be interested to rent there but to sell them off, it could be impossible. And one could be stuck with that property for a very long time.

What you're doing now is a great idea which I know some Singaporeans do. That's the best cos in Singapore, I think it's easier to find tenants, and you get higher rental in S$ while your Malaysian house is so much cheaper to maintain. But for me, I am a lot more comfortable to be based in Singapore because I can't cope with the long travel everyday across the checkpoint. It's a lot tougher in that sense as far as investment is concerned.

Yes, it is easier to get tenants and I already have $2.7K offers. Problem is JB home is not ready yet. Renovation yet to begin.

 

[sgcount]

nextreal, *claps claps!* Yes, keep your intellectual posts coming in! I love such discussions. Wow, those figures you quoted sound like some good research done.

What you said makes sense. It's worrying right, if we just use our heads? But you know, experienced investors always tell us we should only use our heads to judge if a property investment is worth it. Using our hearts can make us emotional and add too much of our personal feelings inside and cause wrong decisions to be made. That's what made me hold back on CG Danga bay. I like the surroundings. I wish everyday I could be there and not worry about traffic to singapore. But the logical head thinks: If this is for investment, rather than own stay, who's gonna rent here with such high costs? Hardly! Immediately, the alarm bell rang inside me to avoid it.

I guess we all know the prices of JB condos now are really very expensive. And as you've analyzed, we all also know there won't be too many Johoreans to rent those residences. Moreover, I was told they would never pay so much. Their salaries are definitely a limiting factor. That's the next worry. Even if you have the numbers for people to rent, would they pay the amount to help us ease our monthly bank loan? I doubt so. They will rather look for the old cheaper condos elsewhere. The only people I can think of are the foreigners. Not just any foreigner. But the higher paying ones. But compared to Malaysian locals, their numbers are not significant enough.

Having argued so much, the "heart" part tells us one day, dunno when, somehow, Iskandar will be big and hence our properties will go up in price... and then what....? So we sell to make the profits? Not necessarily. I just read an article that says don't be too happy even if the property you bought has increased in price. Cos until you can find an interested buyer, you can't convert that paper profit into real money. I thought that makes a lot of sense. And hence, I was back to using my head again! In dilemma!

Now I'm beginning to appreciate the risks involved.... Using the head only, everything is pointing to the fact that it's not wise to buy JB properties for investment. But using the heart (can be dangerous!) and maybe seeing so many others doing the same thing (herd mentality.... towards future disaster???), we want a piece of the pie also!

It sounds like you made an investment yourself! Don't mind me asking where...? Thanks for sharing as usual!

 

[bnib11]

Like your points. Clean, precise and straight fwd. I am sure many will benefit from your rationalized points. I had vested in iskandar but definitely with a clear head and heart to know the risks involved. I still choose to believe that the eventual success of this mega project really leverage on the collective will and determination of both governments current and future to make it happen. Tons of funds have been injected and stakes are high to see it succeed. Again, this is my personal view.

 

[sgcount]

I cruched other statistics. The conclusion is insufficient landed to meet the demands of locals. The problem only surfaced last year because there was a gross mis-match. Any sub $600k RM landed will be snapped up quite fast, especially if they r new n above 2000 sqft in good locations. With land n construction costs going up, it is quite safe to say landed will hold value. Condos r highly dependent on location. But I believe e actual supply will be lower, because contractors will be fighting for resources to build.

I can't quite confirm it... I've read some say Johor people prefer landed but recently, some experts say condos are easier to rent out cos it's not so large and working people prefer so as easier to maintain....Generally safer also.

 

[sgcount]

Yes, it is easier to get tenants and I already have $2.7K offers. Problem is JB home is not ready yet. Renovation yet to begin.

Shiok! $2.7k.. imagine how much that is in RM. But will you be driving in and out of Sing/JB everyday for work? I assume you are working? :P

 

[Frodo]

Shiok! $2.7k.. imagine how much that is in RM. But will you be driving in and out of Sing/JB everyday for work? I assume you are working? :P

Yah, commuting daily between JB and Singapore.

 

[freekazoid]

Nextreal, that's a very nice piece. I have to ask...153,582 number from?

One more big major factor to consider - Buyer demand from Singapore (Citizen, Msian PR + Foreigner) and some regional demand. Singapore based buyers has the appetite and focus on up-market segment.

Assumption johorean demand are more towards local base area of more competitive pricing....and they represent minority demand in Danga Bay, Medini, PH etc.

 

[alnine]

Anyone like to share his condo or landed renting experiance in iskandar ?
Anyone like to share if his Sky Exec was easy to rent or sell.

 

[sgcount]

I've no experience with Sky Exec directly. But I have seen a few of the same condos put up on the property website unsold and not rented for months. Even though they are asking less psf than what you can find in the surrounding area. Looks quite dismal.

 

[sgcount]

Good read:

http://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

Some comments from posters in that forum that strike hard:

"The writer is absolutely right. When my boss invested in a piece of land in Iskandar many years ago and the said land has appreciated greatly in value on paper he is still having great difficulty in disposing of it at market value. There seems to be no buyer although a developer of housing units in the neighbourhood advertised the area to be prime estate."

"i do agree with Getty, I have a friend doing business in JB for almost 20 yrs, he has never profited from his pty purchase advise me to stay away from investing in MY, recently met friend from KL advise like wise"

"I remember in the early 90s, my friend who bought a unit at Damansara has to forfeit her deposit and progressive payments, because she could not find a buyer after almost 2 years."

"I invested in KL 10 years ago and suffered a lost 50 percent when I finally sold it due to income tax, high property tax, low rentals plus agent fees and currency depreciation."

I can't verify the truths of the above. So take them with a pinch of salt! Just to share only....

 

[malpaso]

Now, the annual population growth rate in Johor stems from 1.8% to 1.1% since 2009 (it has stagnate for the past 2 to 3 years). Assuming we take an optimistic 1.5% constant annual growth rate, that means every year, Johor's population grows by around 50,000./QUOTE]

according to ho chin soon, pop growth is 3-5% pa in iskandar (i assume that means south johor.) page 12.

http://www.hochinsoon.com/dl/130704-FollowTheInfrastructure.pdf

 

[FHBH12]

Now, the annual population growth rate in Johor stems from 1.8% to 1.1% since 2009 (it has stagnate for the past 2 to 3 years). Assuming we take an optimistic 1.5% constant annual growth rate, that means every year, Johor's population grows by around 50,000./QUOTE]

according to ho chin soon, pop growth is 3-5% pa in iskandar (i assume that means south johor.) page 12.

http://www.hochinsoon.com/dl/130704-FollowTheInfrastructure.pdf

I also have doubts about the official statistics because I see families of 2-3 kids everywhere in Bukit Indah. Population growth rate should be higher. Minimum 3%.

 

[FHBH12]

Good read:

http://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

Some comments from posters in that forum that strike hard:

"The writer is absolutely right. When my boss invested in a piece of land in Iskandar many years ago and the said land has appreciated greatly in value on paper he is still having great difficulty in disposing of it at market value. There seems to be no buyer although a developer of housing units in the neighbourhood advertised the area to be prime estate."

"i do agree with Getty, I have a friend doing business in JB for almost 20 yrs, he has never profited from his pty purchase advise me to stay away from investing in MY, recently met friend from KL advise like wise"

"I remember in the early 90s, my friend who bought a unit at Damansara has to forfeit her deposit and progressive payments, because she could not find a buyer after almost 2 years."

"I invested in KL 10 years ago and suffered a lost 50 percent when I finally sold it due to income tax, high property tax, low rentals plus agent fees and currency depreciation."

I can't verify the truths of the above. So take them with a pinch of salt! Just to share only....

KL prices are very high now. How to lose 50%?

http://www.globalpropertyguide.com/Asia/malaysia/Price-History

 

[nextreal]

So do you agree with me any rental return forecast are all not realistic. Hence I never think about rental return.

Yes, I do agree with you.

Iskandar's investment is more about capital appreciation.

 

[nextreal]

nextreal, *claps claps!* Yes, keep your intellectual posts coming in! I love such discussions. Wow, those figures you quoted sound like some good research done.

What you said makes sense. It's worrying right, if we just use our heads? But you know, experienced investors always tell us we should only use our heads to judge if a property investment is worth it. Using our hearts can make us emotional and add too much of our personal feelings inside and cause wrong decisions to be made. That's what made me hold back on CG Danga bay. I like the surroundings. I wish everyday I could be there and not worry about traffic to singapore. But the logical head thinks: If this is for investment, rather than own stay, who's gonna rent here with such high costs? Hardly! Immediately, the alarm bell rang inside me to avoid it.

Having argued so much, the "heart" part tells us one day, dunno when, somehow, Iskandar will be big and hence our properties will go up in price... and then what....? So we sell to make the profits? Not necessarily. I just read an article that says don't be too happy even if the property you bought has increased in price. Cos until you can find an interested buyer, you can't convert that paper profit into real money. I thought that makes a lot of sense. And hence, I was back to using my head again! In dilemma!

Hi, I'm glad you appreciate my post.

Everyone's heart talks differently. For me, I have been making decisions using both heart and head for a long time now, for almost all my investments, trades and big purchases. Unlike experienced investors, if I had purely used my head, I would not have made any of such purchases. Personally, I think fear and greed: 2 big sins in investment and trading, are more head than heart.

Anyway, I forgot another "anatomy" that some investors, and I, use - gut. Sometimes, the science (head) and art (heart) contradicts. That's when I say, "heck, just go ahead!"

Now I'm beginning to appreciate the risks involved.... Using the head only, everything is pointing to the fact that it's not wise to buy JB properties for investment. But using the heart (can be dangerous!) and maybe seeing so many others doing the same thing (herd mentality.... towards future disaster???), we want a piece of the pie also!

If my opinion means anything, I don't think we have reached the herd mentality for investing in Iskandar yet. In Sg, yes, but IM, not yet. To me, it's herd mentality when my mom or aunts, or the char kway teow uncle start giving positive advice on investing there. That's what I picked up from reading a book named "Mean Markets and the Lizard Brain" years ago.

Today, there are still a large percentage of skeptics and contrarians when in comes to property investing in IM, or anywhere in Malaysia.

It sounds like you made an investment yourself! Don't mind me asking where...? Thanks for sharing as usual!

You made a good deduction! I have a unit at Setia Eco Cascadia and another at Meridin@Medini.

 

[shctaw]

Yesterday drive pass Puteri Harbour. Counted a total of 7 person. (excluding myself) and about 6 crews at the restaurant.

Surprise to see so little people in a hype area during a Malaysia public holiday.

Go figure.

 

[nextreal]

I still choose to believe that the eventual success of this mega project really leverage on the collective will and determination of both governments current and future to make it happen. Tons of funds have been injected and stakes are high to see it succeed. Again, this is my personal view.

I agree with you on this. One big reason why IM will likely work this time round is the change in both countries' leadership, who have been rather determined and committal. And more than tons of funds been injected, a lot of big Sg names like Temasek, CapitalLand and Peter Lim have ventured into IM. Even EDB was asking SMEs to invest there.