In my opinion these are nothing more then fear mongering.I plan to own stay not for investment..so it does not effect me that much.
In any case,Iskandar is too big to fail.I doubt it wil fail.
Besides its normal..that developer has to slash price and gives discounts etc cos they hv already marked up very high at initial stage..to cushion things like TIS.
Or they have reach a good target..other units are something to clear quick.we will never now the actual story won't we....
In any case,Iskandar is too big to fail.I doubt it wil fail.
Besides its normal..that developer has to slash price and gives discounts etc cos they hv already marked up very high at initial stage..to cushion things like TIS.
Or they have reach a good target..other units are something to clear quick.we will never now the actual story won't we....
Yo, with this current market condition it would be suicidal to buy lah!
Johore Iskandar property market is in trouble:
CRACKS are starting to show in Iskandar Malaysia’s once-booming property market.
UEM Sunrise Bhd, considered a bellwether to Iskandar, this week slashed its sales target for 2014 to RM2bil from RM3.2bil, citing weakness in the market for homes in the economic corridor south of Johor.
This comes as a whopping 100,000 units of high-rise apartments – many of them from the China developers, and many of them on the waterfront – are set to flood the market, data from real estate consultants shows.
And things could get worse before they get better.
A report in the Financial Times on Wednesday said that China Vanke Co, the country’s biggest developer, is offering up to US$325,000 (RM1.02m) in discounts via e-commerce site Taobao to entice homebuyers amid slackening demand.
Sluggish sales and an oversupply in the second and third-tier Chinese cities are driving prices lower, Bloomberg reported.
Here, the talk among property circles is that Country Garden Holdings Co, which last year rolled out a record 9,000 high-rise units on the coastline enclave of Danga Bay, could follow suit.
It is believed that about half of the condominiums in Country Garden Danga Bay remain unsold, and the Guangdong-based property giant is now looking increasingly desperate to unload its stock by either hiking discounts of dropping prices, although the exact quantum is unknown.
Company officials did not respond to text messages from StarBizWeek seeking comment.
The Danga Bay project was launched with much fanfare last year at an average of RM900 per sq ft.
Most of the real estate firms in Johor Bahru have been roped in to sell homes for Country Garden Danga Bay, and it is dangling commissions of up to 8% versus the typical 2% to 3% as an added incentive, brokers tell StarBizWeek.
In fact, says an agent, three people were spotted carrying sandwich boards near a bank in Johor Bahru last month advertising units in Country Garden Danga Bay. It is not clear who they were representing, but property executives speculate they could be acting for Country Garden’s foreign buyers.
Channel checks with agents reveal that the Phase 2 units are going for the same price for all floors, a departure from the usual practice of pricing the topmost levels at a premium.
Buyers can opt for the promotion price, which in some instances adds up to a 40% discount, provided they pay for the property in cash over several transactions. Doing so will shave RM300,000 off the price of a single-room unit measuring between 400 to 500 sq ft, which would normally cost RM800,000.
Country Garden hasn’t raised its maximum discount beyond 21% since launch day, say agents familiar with the matter, but it may not be long before the company has to dump prices.
Right next door, China’s state-owned Greenland Group will soon launch 2,478 units of apartments and townhouses, according to PA International Property Consultants Sdn Bhd executive director V. Sivadas.
R&F’s Princess Cove project will introduce about 3,000 units of apartments in the first phase, and another 30,000-plus units thereafter.
“There are also a few other projects in the Danga Bay area being prepared for similar types of developments,” he tells StarBizWeek via e-mail.
The problem here is clearly one of mismatch between demand and supply, Sivadas points out.
Demand remains strong for affordable homes costing below RM400,000, yet much of the new supply is heavily skewed towards high-rises.
“Our records indicate that slightly more than 100 high-rise projects scattered throughout Johor Bahru and Iskandar Malaysia, comprising a little over 100,000 units, are expected to come onstream in the next few years.
“One third of that is within the R&F site, and another 10% within known projects at Danga Bay, where Country Garden and Greenland are based.
“We expect more high-rise projects to be planned within waterfront areas in the Danga Bay region, such as Stulang Laut, Bayu Puteri and Puteri Harbour. The proposed Forest City at the Second Link in Nusajaya is another huge project on the horizon,” he quips.
All that has led to a visible slowdown over the past 10 months.
“Many investors, particularly foreigners (the main target for high-rise projects in the waterfront areas), appear to be adopting a wait-and-see attitude.
“We have not helped ourselves by changing policies and the price threshold limits. We, however, do not expect to see a crash in the market unless there is a catastrophic failure at the national, regional and global levels,” Sivadas notes.
“In property development, success is predominantly driven by demand, not supply. There is an urgent need to boost demand and facilitate ease of purchase by locals as well as foreigners.
“We require more employment generators in Iskandar Malaysia and facilitated migration and immigration to ease or solve acute labour shortages across many sectors. Also, a balance must be sought to ensure controls on speculative activity, which was prevalent for the past few years up to end-2013.
“In the meantime, the question almost everyone is asking is, who will occupy the vast numbers of high-rise, high-priced waterfront units which were mainly purchased for investment?” he asks.
“We are not sure at the moment.”
But there are bright spots, says Landserve (Johor) Sdn Bhd executive director Wee Soon Chit.
“I believe that value-for-money products will still see demand. For example, Botanika@Bayu Puteri (by Tebrau Teguh Bhd) is doing well because their prices range from RM430 to RM500 per sq ft.
“We expect the industrial sector to grow further due to demand from Singapore industrialists, especially the Jurong area. The Singapore government recently announced that the Jurong area will be re-zoned, and the victims will be industrial companies who have no choice but to relocate,” Wee reasons.
A number of recent Iskandar launches, like Sunway Bhd’s Citrine office suites and Eastern & Oriental Bhd’s Avira Terraces, were snapped up.
Even so, sentiment could get worse in 2015-2016, when a large number of the high-rises sold during 2012 and 2013 are handed over, according to Maybank IB Research analyst Wong Wei Sum. The problem is especially acute in hotspots such as Nusajaya, Medini and Danga Bay.
“We welcome foreign direct investment into Johor, but not at the expense of the local players,” laments one industry executive.
“It was going so well until a couple of years ago. Now they seem to have killed the goose that laid the golden egg.”
While the Chinese may be accustomed to building thousands upon thousands of apartments, the Malaysian market simply can’t take that kind of volume, the executive says.
“I hope the market will cool just enough to make them realise that. The state government also needs to take a good, hard look at the situation.”
