Rental and Resale (All about Rental and Resale prices in Iskandar)

[mpan12]

I live in my own property now in Singapore. It's not for investment. Are you telling me I am obliged to stay in it till forever without the ability to sell it off? Of course not! Along the way, I have the choice if I want to sell it, whether for profits or to move to another location.

So it's the same with Iskandar. If you buy with the intention to stay there, so be it. But don't you want to have the option to sell it away if need be? What I am saying here is, for Iskandar properties, even if you buy for your own use/retirement, that option to sell next time may be limited as you could likely make a loss.

I suspect many initially bought their Iskandar properties with the intention to invest. But when they realize the rental may be low or non-existent, they change their plans and say Ok, I'll use it for myself. What I am saying is, Yes, you can, but be prepared you may not be able to sell it at profit next time. (Don't forget your bank loan/depreciating currency.) Provided you can even find an interested buyer given there is a huge crop of properties coming on the market for many years to come.

Precisely because Iskandar properties are not fixed for retirees that's why all the more you should have the option to sell it away next time. If you're stuck with it and say Well, I'm buying it for my own retirement anyway, so I'm not afraid if prices drop, well, at best, that's just a consolation to yourself. That's why I also mentioned it should be money you are willing to lose.

Buy for own use / retirement - prepared hold on to it possibly at loss?
If buying for own use / retirement, making $ is last thing on our mind le brudder. (Thanks for your advices anyway)
Eg: Spore's new 45years Flexi 2room Mickey mouse Flat at mature estate for retirees.
Can cost as high as 500k MYR after conversion. Unable resell. Diminishing returns. Yet sold out. Why?
Answer: Because it's for retirees… Not for investment. Iskandar properties are Freehold!!! (Why do i even bother?)

:*:

 

[Tekkun]

I live in my own property now in Singapore. It's not for investment. Are you telling me I am obliged to stay in it till forever without the ability to sell it off? Of course not! Along the way, I have the choice if I want to sell it, whether for profits or to move to another location.

So it's the same with Iskandar. If you buy with the intention to stay there, so be it. But don't you want to have the option to sell it away if need be? What I am saying here is, for Iskandar properties, even if you buy for your own use/retirement, that option to sell next time may be limited as you could likely make a loss.

I suspect many initially bought their Iskandar properties with the intention to invest. But when they realize the rental may be low or non-existent, they change their plans and say Ok, I'll use it for myself. What I am saying is, Yes, you can, but be prepared you may not be able to sell it at profit next time. (Don't forget your bank loan/depreciating currency.) Provided you can even find an interested buyer given there is a huge crop of properties coming on the market for many years to come.

Precisely because Iskandar properties are not fixed for retirees that's why all the more you should have the option to sell it away next time. If you're stuck with it and say Well, I'm buying it for my own retirement anyway, so I'm not afraid if prices drop, well, at best, that's just a consolation to yourself. That's why I also mentioned it should be money you are willing to lose.

Chocolate is a very well establised investor in Iskandar.

 

[Frodo]

Can't help you much here. But from a friend's aunt who is Malaysian, yes, rental is difficult and low.

Some of the condos in Bukit Indah are also facing problems now, not just rental. The recently completed D Inspire was poorly designed, not according to the expectations of buyers, poor workmanship and the last I heard, part of it was already converted to a cheap motel. Buyers are frustrated as expected.

Puteri Harbour condo is also not doing well at the moment. All the whatever promised ferry service to Singapore is a fairy tale which buyers of that area's properties hold on to tightly as they continue to dream about their Sentosa-like living experience.

Medini is not even completed yet so can't talk about rental. This place had many rushing in to buy condos some 2-3 years ago. From an investment point of view, this place has a gloomy outlook to many property analysts (and to me also). There is a huge oversupply coming up in the next 2-3 years and beyond. You don't expect to get good rentals or even be able to find tenants or buyers.

If you ask people here, many of them will tell you all the above are not true. That's because their views are naturally biased and they have vested interest in the Iskandar properties they have bought.

I suggest you talk to people who have not bought Iskandar properties, people out of this forum, and those who are not trying to sell you anything (Eg property agents) to understand the situation better.

Unless it's money you are willing to lose, or you have too much excess money lying around not knowing what to do with them, I see Iskandar properties as risky and uncertain. If you really really feel the itch to buy, do it for your own use or retirement. But again, be prepared to hold on to it possibly at loss.

The issue is not that the points mentioned above are true or not, but whether if true, they will continue to be true in the next few years, or 10 years from now.

And as mentioned before, there is no neutral party. When you mentioned to talk to other people you probably meant those who are negative towards Iskandar because you are of the view that people here are just too naively and gullibly positive.

Perhaps the only neutral person would be who, when asked about their views on Iskandar, will look at you blankly and say, "What is Iskandar? Where is Iskandar? What is JB? Who is JB? Who is Iskandar in JB? Male? Female? Nice person?"

 

[Frodo]

I live in my own property now in Singapore. It's not for investment. Are you telling me I am obliged to stay in it till forever without the ability to sell it off? Of course not! Along the way, I have the choice if I want to sell it, whether for profits or to move to another location.

So it's the same with Iskandar. If you buy with the intention to stay there, so be it. But don't you want to have the option to sell it away if need be? What I am saying here is, for Iskandar properties, even if you buy for your own use/retirement, that option to sell next time may be limited as you could likely make a loss.

I suspect many initially bought their Iskandar properties with the intention to invest. But when they realize the rental may be low or non-existent, they change their plans and say Ok, I'll use it for myself. What I am saying is, Yes, you can, but be prepared you may not be able to sell it at profit next time. (Don't forget your bank loan/depreciating currency.) Provided you can even find an interested buyer given there is a huge crop of properties coming on the market for many years to come.

Precisely because Iskandar properties are not fixed for retirees that's why all the more you should have the option to sell it away next time. If you're stuck with it and say Well, I'm buying it for my own retirement anyway, so I'm not afraid if prices drop, well, at best, that's just a consolation to yourself. That's why I also mentioned it should be money you are willing to lose.

With any investment there is always the possibility of a loss. Conditions beyond your control or not foreseen can happen and take your best laid plans to flight, either making you a pauper or a prince, so to speak.

When it comes to properties they are meant for long term, and the general long term trend, is that of capital appreciation. In view of the vision for Iskandar I believe the long term future is not gloomy.

 

[tstar]

i bought for retirement. as i feel that i do not have sufficient financial means to support ourselves in sg through all those years when retired.

if you read news you will know how bad sg manufacturing is. if you are a salaried employee, i do not think that any company willl keep your job till you reach 65. likely you will get retrenched in early 50s if in IT or electronics. unless keep working as a cleaner.

these days one has to take care of himself.

 

[eric3417]

Indeed… A roof over my head with manageable expenses till the day i submit IC is my Top concern.
Not making $$$ from my House in Iskandar. I have serious doubts on retaining meaningful employment next decade in SG.
I also have very gloomy outlook that when i retire, i can live in SG with my little savings/cpf Life payout that's provided i live so long.
Iskandar is a Long term planning for me right up to my time on Earth comes to an End. $$$$$ cannot bring to my Grave oso.
Having a roof over my Head & making my whatever $ stretch further be it living expenses/medical etc is Top priority.

In short, I see my house in Iskandar as an Insurance Plan to fall back on.
SG is inflating way out of my league and the Gap is widening every year.

Investing wise i'm not commenting coz i got no Crystal Ball.
I only know Msia GDP is solid. Population is young.
I am cautiously Optimistic in it's future.

I only hope prices dun creep up Too much.
Very scare those China $$$.
Very Fierce!!!

 

[Tekkun]

i bought for retirement. as i feel that i do not have sufficient financial means to support ourselves in sg through all those years when retired.

if you read news you will know how bad sg manufacturing is. if you are a salaried employee, i do not think that any company willl keep your job till you reach 65. likely you will get retrenched in early 50s if in IT or electronics. unless keep working as a cleaner.

these days one has to take care of himself.

I had a very close relative who worked for NatSteel for nearly 30 years. When Tata took over some years back, there's subtle forced resignations especially those elderly ones. He stopped work in 2003 and was jobless as it is difficult to get a job at 58. He has nothing but a HDB flat. Unfortunately he was down with cancer (maybe due to stress) and passed on few weeks back. All he had was a 3 little medals being recognition as a good grassroot community worker. His wife is not working. It is good to plan early on the "what ifs".

Iskandar is certainly an option. Staying put in Singapore in a HDB for retirement is tough.

 

[comfy]

That is why I think every Singaporean should but One Property in Iskandar JB and an insurance plan - cheap and good option!
Buy it before this idea flies!!

I had a very close relative who worked for NatSteel for nearly 30 years. When Tata took over some years back, there's subtle forced resignations especially those elderly ones. He stopped work in 2003 and was jobless as it is difficult to get a job at 58. He has nothing but a HDB flat. Unfortunately he was down with cancer (maybe due to stress) and passed on few weeks back. All he had was a 3 little medals being recognition as a good grassroot community worker. His wife is not working. It is good to plan early on the "what ifs".

Iskandar is certainly an option. Staying put in Singapore in a HDB for retirement is tough.

 

[Frodo]

I had a very close relative who worked for NatSteel for nearly 30 years. When Tata took over some years back, there's subtle forced resignations especially those elderly ones. He stopped work in 2003 and was jobless as it is difficult to get a job at 58. He has nothing but a HDB flat. Unfortunately he was down with cancer (maybe due to stress) and passed on few weeks back. All he had was a 3 little medals being recognition as a good grassroot community worker. His wife is not working. It is good to plan early on the "what ifs".

Iskandar is certainly an option. Staying put in Singapore in a HDB for retirement is tough.

The govt also knows, which is why they had to enhanced the lease buyback scheme to entice more retired people to join.

 

[mpan12]

When I mentioned "neutral", I mean those who have no vested interest on Iskandar properties. Meaning, they are not buyers, neither are they property developers and agents.

If one defines "neutral" as someone who knows nothing about Iskandar or property investment, then of course there's nothing to talk about. Actually, if you really do ask such a person who knows little or nothing about Iskandar, I think the situation will not be in your favour. You can expect that the person will most likely NOT want to invest in Iskandar because he or she knows nothing about the place!

Let's not get hung up with the definition of "neutral".

Just approach people who know about Iskandar and other places. Ask them why they did not invest in Iskandar. There's nothing wrong about being negative about it. If they are so, then find out why. Listen and evaluate to see if what they say makes sense.

If you really still want to insist this is not being "neutral", then ask those who don't have any property investments at all. Ask the kids at school, the undergrads, the young working couple, the housewives, your colleagues owning and living in a single property if they will invest in Iskandar. So much cheaper than SG properties and bigger in size! No brainer investment???? Listen to what they say. Better still, talk to your Malaysian friends.

Having said much, I believe to each his own. It's a never ending dispute. I understand this is an "Iskandar forum" filled with many buyers so it doesn't make sense for someone who doesn't believe in it to stir up trouble. That's not my intention. I'm just replying to Chocolate's question on the rental of JB properties from the genuine info I have.

I still maintain the general overview about Iskandar is bleak not just for this year but for many years to come. The latest I heard, a 2-bedroom condo in JB at about 900 sq ft is asking for RM2,500 a month rental. This condo has been having difficulties finding a tenant for months. The monthly bank loan is more than what the RM2,500 will cover. And note also that this is not even anywhere close to the peak of Iskandar properties being completed. If the situation is so bad now, when thousands of condos are completed in the next few years, the situation can only get worse.

Bear in mind that your property isn't the only one on the market. You are in competition with countless others all in proximity with one another. And also remember there are excellent and affordable hotels almost everywhere. Tenants and short stayers are spoilt for choice.

Now, if anyone insists "Well, I've got excess money to throw, I don't care, I'm staying there on my own", then of course, there is nothing much to discuss. But the facts about Iskandar remain unchangeable.

Ok, my opinions as usual. I respect any who differs in their thinking.

The issue is not that the points mentioned above are true or not, but whether if true, they will continue to be true in the next few years, or 10 years from now.

And as mentioned before, there is no neutral party. When you mentioned to talk to other people you probably meant those who are negative towards Iskandar because you are of the view that people here are just too naively and gullibly positive.

Perhaps the only neutral person would be who, when asked about their views on Iskandar, will look at you blankly and say, "What is Iskandar? Where is Iskandar? What is JB? Who is JB? Who is Iskandar in JB? Male? Female? Nice person?"

 

[Chocolate]

Chocolate is a very well establised investor in Iskandar.

Thanks Tekkun for that vote of confidence. But I wouldnt say I am a very established investor in Iskandar. I am sure there are many other who entered the market here long before I did in mid 2012 and have a lot more experience. In fact I would say I am definitely more familiar with the Singapore mkt where we have been investing since 2006.

For what its worth, here are my comments to some of the ideas that have been put fwd regarding investing here. Firstly the real estate mkt is now soft on both sides of the Causeway. The vacancy rate in Singapore for Residential units is around 8% now and expected to go up, moreover lets not forget that many owners have taken a rent cut as they renew leases and this 'cut' appears to be on the increase too. Its a tenant's mkt. This has led to Auction or lelong properties steadily climbing.I suppose its no diffferent in Iskandar. I do agree though that Iskandar is higher risk and not necessarily higher return.I have been a landlord in SG since 2006 and have weathered good and bad times, we just have to ride though it. I am more confident the SG mkt will rebound and of course as most of us here are earning Sing dollar, we dont have the added currency risk either.
Why then do some of us choose to buy here in Iskandar for own stay or investment? I agree that even when buying for own stay one should if possible buy something that can be resold without too much difficulty if one needs to move or unlock the cash. But this may not be a top criteria for everyone. Sometimes there are other over-riding concerns. I have met retirees from Singapore who failed to achieve their Singapore dream of buying a condo and so they choose to compromise and buy in Iskandar instead, this gives them the added benefit of "moneytising" their HDB flat by collecting rental that can easily finance all their needs at a comfortable lifestyle. In my own case, I bought a house here although I also have a home in SG, because when my elderly parents need to move in with me on and off, this is more convenient and cost effective. As they are foreigners in SG, I have in the past had to fork out huge sums for their medical. To expect them to travel back to JB everytime they need medical isnt practical or comfortable. Also in JB we can afford a bigger more comfortable house at a fraction of the cost so its a 'getaway' from SG.
As for the quality of construction and defects. I have taken possession of 3 brand new units in SG , 2 condos and 1 townhouse( what they call cluster in SG). Lets compare the landed with my landed here . I would say that my semi-d from SP Setia had less and less serious defects compared to the landed in Singapore. Over there we had serious problems even with our walls ( some of which were only gypsum board, aka dry partition walls) and leaks, defective tiles, even with the marble. So paying 2.5M didnt insure the owners from poor quality.. Moreover the Infinity pool constantly overflowed and flooded some units. The filter in the pool failed to work even when it was new and it was looking like Kallang river with algae blooms. This recurred.I am not saying SP Setia or any other Malaysian developer is better, I am just saying that these thing happen on both sides and in my opinion the only difference is that in MY they use even cheaper materials.But that's likely true for low end condos in SG too. I have seen that in one project by Sim Lian which I will not name as I dont want to offend should any owner from that project be present here. Even CDL is cutting costs these days and doing budget units in locations like Pasir Ris.
As for security, I think we all agree that in reality JB is nowhere near as safe as SG but neither is it infested with criminals waiting to pounce on us everytime we go out. Within my gated and guarded estate I feel safer than I do in a HDB lift in SG.

So coming back to the question of investment I would say, higher risk and not necessarily higher reward than SG. But with the cooling measures how to invest in SG especially in the residential segment? For new entrants and those with lower budgets who cant afford SG properties, its not surprising if they choose to invest in Iskandar which arguably is lower risk than other countries and easier to manage. Since PH was mentioned( I did not and dont plan to invest there) let me just say that its early days yet. Its currently a construction site so rental will remain a challenge until its more livable. Ditto for any other location that heavily under construction. Rental will be a challenge initially. It was the same case for The Sail@Marina Bay and The Berth @Sentosa Cove when they TOP if any seasoned investors care to remember. Whether PH/Medini will eventually do well is yet to be seen .

Discalimer: This is just my opinion and I am no expert. Anyone who chooses to differ is welcome to do so. Let's disagree in a civil manner and respect each others' views.

 

[mpan12]

Chocolate:

Thanks for sharing. I enjoyed reading your post and it's good we exchange opinions like that.

Yes, it's a tenants' market in both SG and JB now.

There is a tendency for some to lump SG and Iskandar together. A Malaysian property agent once said JB's property market follows SG's closely. If SG doesn't do well, JB also doesn't. As if to say don't worry. If SG can make it, Iskandar will do well also. I think that's false sense of consolation. SG and Iskandar are very different. The governments are different, the various systems (eg healthcare, education) are different, the population and race profiles are different. The property market is different too. Only the culture and way of speaking are fairly similar.

I think that's where the danger lies. People rush in to buy Iskandar properties thinking that they will succeed just like how they have with SG's properties. Whether one agrees or not, I have to say this is totally not true in my opinion.

Based on past performances, even if SG property market is slow now, the chances of it rebounding or picking up are a lot higher than Iskandar. The data say a lot. SG is very well-established and the population is there. Iskandar has a lot of land. But the place is lacking in population and a solid plan on how businesses can take off. I see it as a place where many past investors have dumped a lot of money there and you see pictures of Najib and the Iskandar authorities smiling widely with money in their hands. But in their eyes, I don't see that drive and strong affirmation that Iskandar is heading towards a clear direction. They may say they are going to build this and that, but somehow, it's just not convincing how all the things will come together. Maybe the plans will be fulfilled. But by when? 25-30 years time? Will you still be around? Are you investing in Iskandar for yourself or for your grandchildren? That kind of time frame is too long and risky to bet anything on.

On the contrary, when you listen to how the SG government talk and see how they work, you see the drive and momentum. The MRT system was planned all the way in the early 70s and was finally completed in 1987. Many citizens depend on it now. You see the promises made. You see them saying completion date of a certain building is by when, and you can be assured it will be done on time or even before it.

For Iskandar, plans have been delayed indefinitely. Condos that were originally promised to be completed in 2016 are now dragged on to near 2018. What happened to the RTS? I don't know, don't hear of it any more. They even said SG is the one delaying it when we have already designated a place where it should be. So it's excuses, excuses, finger-pointing, typical laziness on the part of the JB authorities. Yet there are tons of condos to be ready in 2017/18. To serve who? All buying for their own stay? I don't think so.

Now, compared to SG, do you think it's easier to rent out your SG condo or Iskandar condo? At least, landlords can lower their rents in SG and they can still find tenants. In Iskandar, I think even if you lower your rent very low, you run the possibility of not getting one. As it is, the rent in JB is so low now that it is unlikely to cover your monthly bank loan. Why bother renting out if you are the one serving your tenant like a slave?

As for safety, I think there's no need to compare much. Singapore is arguable one of the world's safest place to be in, be it in HDB lift or walking alone in the streets at 11pm. JB is nowhere in comparison. But let's put this point aside which has been discusses too many times.

If there is nowhere to invest now, then don't? Why do some ask: "Show me where or how to invest in Singapore? The cooling measures are still there." My reply is, Aren't you already invested in Singapore? Why be so greedy and want more? Must you really plunge your money somewhere in order to feel happy? Be happy that you are already making money in SG now. But that does not mean out of no better way, you decide to put your money in Iskandar, then try to defend all the negative points that are commonly known.

Of course, as I've mentioned too many times, if you have excess cash, if S$300k is only a small part of your $5million wealth, then sure, you can choose to take a chance. Buy an Iskandar condo or house to play with, relax, enjoy. Even if the condo becomes part of a ghost town, little value left, who cares right? You can absorb the pain cos your net worth is much more than S$300k. But for other less wealthy investors or home buyers, a wise decision has to be made. Are you willing to lose S$300k when that amount can be put to better use, such as building up a family or for your children's education? When I say lose, I really mean it. That's the risk. What happens if no buyer wants your property? Ok maybe 20 years later you may find a buyer. But what if you need the money in 5 or 10 years' time? You can't sell. You've got the bank going after you for money every month. Your cash is stuck with a property that has become a liability.

At the moment, many have not dealt with the oversupply issue in Iskandar and the lack of future tenants/buyers. How should there be people appearing miraculously in Iskandar for your properties to boom next time?

If you're a Malaysian, would you rather work in SG to earn 3x more, or would you go to Iskandar? So where is the influx of tenants coming from with thousands of Iskandar condos and houses in the pipeline for the next 5-10 years?

That's the crux of many issues about Iskandar that has to be dealt with.

 

[freedom]

With any investment there is always the possibility of a loss. Conditions beyond your control or not foreseen can happen and take your best laid plans to flight, either making you a pauper or a prince, so to speak.

When it comes to properties they are meant for long term, and the general long term trend, is that of capital appreciation. In view of the vision for Iskandar I believe the long term future is not gloomy.

My Husband and I are considering selling our Sg terrace to retire in JB soon in our JB semiD in Austin Heights...kids can study in nearby Austin Heights International School . I am 40 and hubby 43years old....it is great that I have the option to semi retire or retire if I want too...only JB offers this option due to its lower cost of living, favourable exchange rate, big house , cheap cars, good, affordable international schools and proximity to Sg so that I can commute a few times a week or month if I feel bored or need more money...my job as a locum GP Doctor pays well and is flexible so I can find work in the north of Sg near the causeway...I was from GEP and think that early retirement in JB is an excellent idea..

 

[Frodo]

My Husband and I are considering selling our Sg terrace to retire in JB soon in our JB semiD in Austin Heights...kids can study in nearby Austin Heights International School . I am 40 and hubby 43years old....it is great that I have the option to semi retire or retire if I want too...only JB offers this option due to its lower cost of living, favourable exchange rate, big house , cheap cars, good, affordable international schools and proximity to Sg so that I can commute a few times a week or month if I feel bored or need more money...my job as a locum GP Doctor pays well and is flexible so I can find work in the north of Sg near the causeway...I was from GEP and think that early retirement in JB is an excellent idea..

Semi retired in a semi D! Well done!

Indeed JB offers us some of the comforts in life that would be expensive in Singapore. If you can move your kids activities and educational needs over to JB such that commuting between two countries is minimised that would be even better.

Wishing you and your hubby all the best forward!

 

[freedom]

Thanks Frodo! If my hubby does not get a job soon, I am threatening him with divorce if he does not let me semiretire...I cannot imagine supporting him all my life, I will die young...it is not fair that he works a third or less of his time while I work full time...he does not agree with putting money into Malaysian FD and wants to do business, I tell him to do it with his share of the sales proceeds and I will put my share into FDs...

 

[Frodo]

Thanks Frodo! If my hubby does not get a job soon, I am threatening him with divorce if he does not let me semiretire...I cannot imagine supporting him all my life, I will die young...it is not fair that he works a third or less of his time while I work full time...he does not agree with putting money into Malaysian FD and wants to do business, I tell him to do it with his share of the sales proceeds and I will put my share into FDs...

LOL! Seriously?

Anyway, if I have a SG house I would probably sell it and buy a SG dual key 3 bedroom unit and rent out the 2 bedrooms unit (get passive income) and keep the studio unit for own use. If I can do that with my current HDB that would be best but too bad cannot.

 

[freedom]

I have this phobia that Sg will sink or have a man made earthquake one day with all the building of high rises and in future deep underground city just to accommodate 6.9 or 10 mil... Makes me wanna sell my properties there and escape somewhere safer...

 

[Frodo]

I have this phobia that Sg will sink or have a man made earthquake one day with all the building of high rises and in future deep underground city just to accommodate 6.9 or 10 mil... Makes me wanna sell my properties there and escape somewhere safer...

LOL! Probably won't sink in the next 50 years because still aiming for SG100.

 

[xebay11]

Thanks Frodo! If my hubby does not get a job soon, I am threatening him with divorce if he does not let me semiretire...I cannot imagine supporting him all my life, I will die young...it is not fair that he works a third or less of his time while I work full time...he does not agree with putting money into Malaysian FD and wants to do business, I tell him to do it with his share of the sales proceeds and I will put my share into FDs...

LOL your husband retired long time ago, leaving you to suffer, I feel sorry for you. Any woman would have divorced him long ago.

 

[xebay11]

I have this phobia that Sg will sink or have a man made earthquake one day with all the building of high rises and in future deep underground city just to accommodate 6.9 or 10 mil... Makes me wanna sell my properties there and escape somewhere safer...

Australia beckons.