So, you wanna buy a house in HH?
With the recent economic turmoil stemming from Europe with no good contagion plan yet and latest spate of cooling measures by the SG govt, making a decision to buy a home in HH seems difficult.
Here’s what I think… HH is a great place to live in. It’s in a central location, sits on a golf course, has exclusive clubhouse facilities and has good security. It wouldn’t be too hard to imagine that HH is located in some corner of Singapore…it’d fit right in. Even your neighbours are probably Singaporean, lol.
But, if you are buying the house as an investment, I’m not too confidant you will see the returns you’d like any time soon.
Why? Well firstly, its priced out of the range for the average Malaysian…for sure. JB is not KL….let me repeat, JB is not KL. The good folks in JB just unfortunately don’t earn as much as the KLites…and while a RM3million house in upmarket KL is normal, this is definitely not the case for JB.
What this means is that there will a very limited number of Johorians (and by this, I mean the local locals who actually work in JB) who can afford to buy a HH. In other words, the demand for HH is mainly dependent on, and driven by, Singaporeans and white collar Malaysians working in Singapore.
If you buy a unit in HH to rent out, it needs to cover your mortgage installments, security fee, golf club membership fee and maybe a few percentage extra to make it worth your while. That can come up to quite a bit given the price of the houses at the moment. The question is…..can you think of any of your Singaporean friends who’d be interested to rent your house? Given that the rent is probably more than what a local earns in a month, it’ll be hard to find local takers. Most of my friends already don’t want to come into JB because they are scared, much less want to rent a place to live here…so honestly, how many renters are really out there?
Furthermore, if the supply of houses for rent is high, how high a rent can a homeowner command? Sure, the agents tell you that you can get RM5000 per month easy…but how many units are rented out at this price? And honestly, would you pay RM5000 a month for rent and still have to endure the daily commute to Singapore for work? If it were me, I’d choose to just rent a HDB flat near my workplace in Singapore for the same price.
It’s true…a number of HH homeowners have managed to successfully rent out their unit. But, I think it’s worth finding out exactly how much did these homeowners paid for their house, no? If they bought their terrace house at only ~Rm300k (back when HH was first launched), how much do you think their monthly mortgage costs them and how much rent do you think these owners need to ask for?
And as for capital appreciation…well, that’s really a very long play. Plus, we’ve already missed the boat. I doubt HH prices can continue to rise much more. The houses cannot be priced out of the range of the middle-class Singaporean (and by that, I mean families earning a combined income of maybe $10 – 15k a month). The main benefit of buying a home in JB is that it’s cheap. Period. If it’s not that cheap anymore, coupled with the inconveniece of having to commute plus other associated security risks, then what’s the point of buying a place here?
But as you know, I’m all for living in HH. I’m not trying to discourage you from buying a house here…not at all! It’s just that I see some of the comments on FB and it seems like so many people have lofty ideas of making a quick buck by investing in HH.
And honestly, I like having neighbours. The thought of having an empty houses on my left and right and across the street kinda sucks!
Posted on December 8, 2011 by Audrey
http://horizonhills.wordpress.com/2011/12/08/so-you-wanna-buy-a-house-in-
I agree with the author.
) I doubt they would allow it. Just look at the procedures that can be done cheaper in Malaysia. The Spore gov't will only allow it if there are ties with a Spore hospital e.g. the doctor doing the referral to the Malaysian hospital, is also practising in Spore.
