- Joined
- Jul 29, 2013
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Hi...Nice to hear from you again. I didn't mention you advocated owning multiple properties in Iskandar?But I do know of one guy in the forum who had said he bought a house and 2-3 condos there cos of his enthusiasm that Iskandar will do well and he wants to go against the thinking of the general public. I personally don't think it's wise based on his reasoning but if he has the money, I suppose no one can stop him.
I think before buying a property, one has to establish his or her position first. Are you an investor who wants to make a sensible choice while managing the exposure to risks, or are you a buyer who doesn't need facts/data to justify your purchase cos you are a multi-millionaire, or are you going to live there, etc?
Iskandar is only one of many examples of housing that is cheaper compared to Singapore. If you look at other countries, you can also buy say a 3,000sq ft house with a nice garden for S$400k. But will you rush to buy the property there? Maybe yes, or maybe not. It all depends on your position as I mentioned above. If you think if you are rich enough, even though the place is not well-known, you might buy. Another buyer who thinks the country is too far away or has political instability will likely not buy.
The bottom line is, it doesn't do justice to rush out to buy a property just because it is so much cheaper than Singapore's or because it is near to us. I'm looking from the point of view of a sensible investor with limited capital who wants to put this money to wise use. We are surrounded by other 3rd world countries other than Malaysia. There are also other properties around us which are so much cheaper.
I do understand that some are confident about Iskandar because of the plans that are in place and things that will be set up there. But as an investor, I would go beyond that. To me, I have to see my needs and objectives are met first. I'm not going to care first about how many businesses will be set up there, that a wellness center, hospital, etc will be there. My Number 1 concern is: When I buy that property, I want it to make money for me. If it doesn't, it is a liability and it will cause me to be poorer.
So if Iskandar is being developed, what then could go wrong with investing a home there? The problem with it is, as I've explained, the supply of properties is far too many compared to the amenities and businesses being built. Before one business is completed, a few new residential projects come in. When they are completed, more condos are built, but the demand cannot catch with up the supply. So how can the property make money? I've just read in Medini, another new mixed development with a lot more residential units is coming up. This is even before the thousands of new condos have completed! That's not a good sign for an investor. Because it will mean rental will suffer. As it is, rental is bad now. So projecting several years down the road, it can only get worse.
Coming back to Puteri Harbour, one has to ask: Are you going to fork out S$400k by the mere fact that you can get a high view of some water which cannot be bought in Singapore for the same sum? If money is not a concern to you, meaning if the property cause you to lose money but financially you can take it, then there is no issue with it. But this case is not interesting to discuss because if one has lots of money, he can buy anything he likes, even if the decision is unjustified or silly.
From the point of view of a careful investor who wants to maximise his returns and make an informed decision, it's likely a no go based on the analyses I've given. The risks of not making money from the property is far too high compared to the little possible returns one might get. It will become like an expensive pretty flower vase you put at home but with little or no future value.
Buying a property is about managing risks in one's investment. I think the misleading part is that supporters think the naysayers don't believe that Iskandar is progressing. That's the big mistake I made when I went in. I have friends who advised me to be careful. But I told them, Can't you see Iskandar will have amusement parks, hospitals, shopping centers, etc. It will be vibrant. How can a property I buy there not boom?
Obviously, I did not consider the more important factor of the oversupply of condos and the fact that the demand will not catch up with the huge oversupply. I also did not consider the political uncertainty in Malaysia and the fact that the weak RM currency is not to a foreigner's advantage. You may be buying low as a foreigner but without demand, and if you want to sell next time, you're making a loss overall or worse, you may be stuck with a liability without a way to dispose of the property. I also left out an important factor: The rental in JB is not fantastic. Good new for tenants, bad news for buyers trying to rent out their properties in an oversupply climate that will last for a very long time.
Does the reasoning make sense...?
Your reasoning was not meant for those who bought to stay, but was targeted towards the investors having the profile of Singaporeans living comfortably in Singapore and having some money (or lots of it for that matter) to invest in properties, whether local or overseas. These people want to park their money somewhere to earn returns, and if properties are in mind, then rentals must be of top concern. For such people, your reasoning would be that investing in JB properties (especially condos) would be foolish in view of oversupply, primarily because rentals would either be very low or non-existent to justify the investment.
I stopped at traffic light but this uncle buang my rear and sent me flying. I was like...what the hell man....3 lanes wide and no vehicles left and right but you had to aim for me? Maybe he was using me to stop his bike...LOL!
