Yes, I think the article was frank and to the point. But I don't think many who bought Iskandar necessarily wanted to flip. They really wanted to invest there. Unfortunately, they wrongly thought back then that it will boom, given promises that there will be entertainment centers, schools, shopping centers, etc.
But one big factor most forget is that of the oversupply issue. The Number 1 question you must ask is: WHO is going to rent from you?
The article was being optimistic by saying rents will drop by 20-40%. The painful truth is, there might not even be any rents at all. Not just for a few months but at least several years. One property investor I spoke to recently when we discussed Iskandar even said it's possibly 10 years of no rental, given the number of new units to be released. I'm not sure if he's exaggerating but you can't say it won't happen also. Even if you slash your rental to a ridiculous 50% off, what's the point? You face damage to your condo's interior and still must top up a lot to pay off your loan. You become a slave to your tenant!
I empathize with those who have bought cos I think it's the cooling measures in Singapore introduced back in 2013 that made most people hungry to invest somewhere and suddenly, Iskandar seemed to be the attraction, since it is close to Singapore. There was really no strong reason to go in if you had studied all the various negative factors.
Some bought cos they've never seen a water view from their homes before. So they went to buy Puteri Harbour or Danga Bay. I don't think you are spared from the negative rental problem either. You pay more, you will be subject to a higher loan and naturally, you will expect higher rentals to cover your investment. But again, WHO will rent from you? Even if there are tenants, they can drive less than 5 minutes away and there are literally tens of thousands of other condos asking for much cheaper rents. The demand is simply not there. You can wait but it will be decades we are talking about before we could see things happening, if ever at all. By then, you can no longer recoup your big loss.
Some argue that the RM currency dropping means it's a good thing cos you are buying your condo cheaper. I hope you also realize by now the value of your condo is actually dropping against other currencies, eg SGD. I see buyers chasing after the RM, asking what's the latest conversion rate is, and then converting their SGD to RM every now and then. It started way back when SGD1=RM2.50 and people thought, wow, time to change, cos previously it was at 2.45. You keep chasing after the RM and till today, when it hit above RM3, you are already throwing away 15-20% of your money.
For own stay, I'm not too sure I'm comfortable also. For me, I must always have that possibility to get out if I need to. Buying a property is not like using a dishwasher. After you have finished, you throw the bottle away and it's done. You don't buy a property and then get stuck with it. If you can't sell it next time cos nobody is interested, that's bad. Sell it at a big loss and the whole thing doesn't make sense.
Unless you are rich, have say 20 or more properties scattered everywhere in the world, and somehow don't mind writing off the property in Iskandar, then maybe it's ok for you. But for most common people, it's just a big risk you have to factor into your overall plan.
Now, I'm not being a wet blanket. I'm discussing this purely from an "academic" point of view that applies to all sorts of property investment, not necessarily in Iskandar. We can all learn from one another. Mistakes made can be learnt. It's painful but we move on to be wiser.
I understand many here have bought Iskandar. If it works for you, that's fine. But if it doesn't, yes, it's painful. But I feel it's better to be frank about it rather than delusional. Till today, I still hear people saying they are confident of renting out their 9,000 unit Country Garden condo! Sorry man, I really don't buy into that. Always ask, the WHO question. And also, do you think your condo is the only option available for tenants to choose from?
