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My views on Iskandar. Please share yours.
- Thread starter mpan12
- Start date
Your article has many valid concerns but it needs to be more balanced and backed by some data. Nothing is totally bad, if not we will not have daily jams at the customs from people staying in Johor crossing over to work. You need to consider the underlying forces why so many people still choose to live there.
E.g. My earning power is many times that of my Johor neighbours' but they are definitely enjoying much bigger bang for bucks.
Johor's economy is in a big way driven by Singapore's economy. If you have faith in Singapore's growth, Johor will not be too far behind. Businesses have cycles, so do properties. Just be careful where you are buying and your holding power.
E.g. My earning power is many times that of my Johor neighbours' but they are definitely enjoying much bigger bang for bucks.
Johor's economy is in a big way driven by Singapore's economy. If you have faith in Singapore's growth, Johor will not be too far behind. Businesses have cycles, so do properties. Just be careful where you are buying and your holding power.
I've given the data of the huge oversupply with no demand to match. I think this point alone is big enough to avoid Iskandar altogether, unless one really has a very strong reason to go in.
One problem with Malaysian housing is there is no transparency. So the sales figures, number of units sold, etc are not revealed. I suspect that is why many Singaporean buyers rushed in blindly with the herd mentality.
As for the daily jams, are they mainly Singapore vehicles? I suppose a large part is also the Johoreans who work in Singapore. The number of Singaporeans living in Johor and working in Singapore is incomparable to those who choose to live and work here. Some may endure the daily jam but I don't think the general population is tolerable to that.
Yes, if Singapore does well, as it has been for many years, relative to Johor, I agree Johor will do well. But only in the sense that Singaporeans will want to cross over to have their meals and do their shopping. I've not known that if the property market is booming in Singapore, Johor will be as well. The 2013-2014 surge in Iskandar sales was an exception and not due to any good property news in Johor. Rather, it was because of several misguided reasons.
As I've said, it was a herd mentality -- People rush to buy, I also want to rush in. It was the time when cooling measures were strongly implemented in Singapore. It has little to do with Johor's economic progress. Buyers suddenly thought: Finally, I can own a high floor condo overlooking the straits, live in a big floor area and pay only 30% of the price of a condo in Singapore. Or, they thought they could rent out their properties and start making money. But what many neglected to consider is, where are your tenants coming from? Are the businesses coming in tandem with the completion of all the surrounding properties? How will the RM depreciation eat into your negative profits further?
I don't think "holding power" has any much meaning if one is talking about property that has little perceived value. The factors causing this are many for Iskandar: Political (corruption), economic (sliding RM currency, 3rd world status, lack of attraction for businesses to set up), social (safety issues), planning (huge oversupply).
Holding power only makes sense if for eg, one is invested in a property during an economic downturn. Rental goes down, resale value drops but you are able to hold the property that has value, while those who don't have the money or are afraid of the bleak situation will not. However, after the low period, prices will soar again and you make your money.
But for Iskandar, I'm not sure if people are "holding on" to their properties because they have already paid a lot of deposit and it's too late to back out now, or is it because they truly believe Iskandar will boom next time? With all the bleak data and facts presented, it's not hard to assume that many will rather back off and get back 100% of their money. Unfortunately, this is not possible.
I don't think "holding power" has any much meaning if one is talking about property that has little perceived value. The factors causing this are many for Iskandar: Political (corruption), economic (sliding RM currency, 3rd world status, lack of attraction for businesses to set up), social (safety issues), planning (huge oversupply).
Holding power only makes sense if for eg, one is invested in a property during an economic downturn. Rental goes down, resale value drops but you are able to hold the property that has value, while those who don't have the money or are afraid of the bleak situation will not. However, after the low period, prices will soar again and you make your money.
But for Iskandar, I'm not sure if people are "holding on" to their properties because they have already paid a lot of deposit and it's too late to back out now, or is it because they truly believe Iskandar will boom next time? With all the bleak data and facts presented, it's not hard to assume that many will rather back off and get back 100% of their money. Unfortunately, this is not possible.
Holding power also does not mean you can afford to pay for the mortgage every month at a loss (because of no tenant) and just hang in there for years and years. You are actually draining your money away. The capital appreciation that you need to have to compensate for the loss in rental income and mortgage for many years is almost 100% unlikely to cover. Sorry to sound crude but that's like silting one's wrist and slowly letting blood drip out! A buyer may be strong enough to withstand this (holding power) and not die but he is actually becoming weaker and weaker (money draining out).
I wonder why people are still want to invest so much even when their TDSR is maxed out. Actually, 60% is already a lot. It should rightly be lesser than that. If one pushes further, then that is already over-committed. No cash better don't invest. And of all places, Iskandar. But I do respect their decisions. It could be misguided judgement.
Ok as long as the buyer knows what he's doing, then go ahead. Problem is, from the way I see the discussions in other forums, I don't think many know what they are doing or heading for.
Actually, the situation is VERY BAD from an investment standpoint. It's just whether one wants to admit it or not. I can understand why for buyers it's so so so difficult to accept it.
When you have already plunge so much of your money in Iskandar (those who bought it at a high price after 2012, not those who bought way back), it's heart breaking to hear all the bad news or lose all that money. So maybe hoping for the best is an alternative form of thinking.
A very excellent article.. Thanks for the effort.
Property buying is a very emotive thing. Not many people are able to apply hard headed analytical decisions when deciding. But since it's bought, I would say that just ride with it.
Who knows what's going to happen.
Singapore during the down turn also no one dare to buy.. After that everyone rush in. Now there is likely to be some problem with over supply in Singapore too..
And the amount of commitment is probably a few times higher then Johor. How come no one says that it's a bad investment.. Many people buy second home in Singapore too, it's just that the US free printing of money is driving many people to place money in assets rather then paper money.
And it's a natural response to the economic conditions at that time.. Whether it will work out or not no one really knows. It's just that once you start to dabble in property you better have holding power..
But truth be told, it's probably better to avoid condos in Iskandar. Landed property is probably a better way forward as an investment vehicle
Property buying is a very emotive thing. Not many people are able to apply hard headed analytical decisions when deciding. But since it's bought, I would say that just ride with it.
Who knows what's going to happen.
Singapore during the down turn also no one dare to buy.. After that everyone rush in. Now there is likely to be some problem with over supply in Singapore too..
And the amount of commitment is probably a few times higher then Johor. How come no one says that it's a bad investment.. Many people buy second home in Singapore too, it's just that the US free printing of money is driving many people to place money in assets rather then paper money.
And it's a natural response to the economic conditions at that time.. Whether it will work out or not no one really knows. It's just that once you start to dabble in property you better have holding power..
But truth be told, it's probably better to avoid condos in Iskandar. Landed property is probably a better way forward as an investment vehicle
Actually TDSR is based on what is officially declared income, many, many people under declare their "other sources" of income so they have spare cash to invest. But I totally agree with you on the bad news for those who came in after 2012, those who invested in 2007 to 2008 have made some money, or bought dirt cheap for own stay and sadly many blindly went in thinking that this result can be replicated.
Because Singapore has a plan for 6.9 and 10m people, recently endorsed by 70% already, so it is just a matter of time for the oversupply to catch up....so cannot say property is bad investment in SG.
Sometime I wonder why there are many people who are 'so helpful' to their fellow Singaporeans, that they will want to write long articles about the ills of investing in Iskandar.
Anway the proof of the pudding is in the eating. Just wait and see how the situation unfolds in the coming years, and we will know who's right and who's wrong.
Anway the proof of the pudding is in the eating. Just wait and see how the situation unfolds in the coming years, and we will know who's right and who's wrong.
There must be an underlying reason for them spending time to do that. I believe most times it's self serving .
Most likely they are one of those 70% die hard fans of lightning party.
Why self serving? those who bought and committed, we can only wish them luck. For those who have not committed or only committed a small amount (small desposit) they may want to reconsider and even forfeit, all I want them is to open their eyes as many Singaporeans do not understand the property market well, I admit that when I was younger, I wish I had gurus to guide me, (I only had my father to guide me), so that I would be far richer than what I am now but the real self serving people never gave advice....so how is that self serving when we are giving advice? After all, if you feel in any way that any advice is self serving, please just ignore.
Well, my guess is these people probably falls under a few categories below:-
1) Kind-hearted Singaporeans who dont want fellow Singaporeans to be scammed, and who have a lot of time on their hands
2) SG property agents who think Iskandar is taking away their business
3) Singaporeans, PRs and Malaysians hoping to buy Iskandar properties on the cheap
4) Singaporeans/PR/Malaysians who have no intention to buy Iskandar properties, yet hope that MY properties will crash and buyers will suffer.
Yes very true, good analysis.
copied and pasted from Reds , which u agreed is good analysis
2) SG property agents who think Iskandar is taking away their business
3) Singaporeans, PRs and Malaysians hoping to buy Iskandar properties on the cheap
4) Singaporeans/PR/Malaysians who have no intention to buy Iskandar properties, yet hope that MY properties will crash and buyers will suffer.
Have been receiving more Sg condo adverts on my HP and seeing the Sunway Iskandar on TV makes me think that there is just too much oversupply and perhaps poor demand....hence, articles like these ie likely reason number 2)
Actually the writings are on the wall for SG property agents, for owners both buying and selling it is always better to get foreigners as agents as they can have first hand contacts for foreign buyers and tenants.
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