2009 Johor In Hindsight

The figures rolling in to close off 2009 point to a more upbeat property market for Johor, as analysts point to hopes for a more buoyant year ahead, overall...

Analysts, developers and buyers alike appear to be looking forward to a more buoyant year ahead for the Malaysian property market, after the fear and uncertainty over the last two years. The Johor property market also appears blessed by this positive outlook.

According to Dr Zalian Mohd Isa, director of National Property Information Centre (NAPIC – an agency under the Valuation and Property Services Department in the Finance Ministry), although developers nationwide were still remaining cautious over the economy this year, demand for new homes would be stronger in selected regions while house prices would sustain and rise in sought-after addresses and housing types.

Speaking at the 3rd Malaysian Property Summit organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) on Jan 26, Dr Zalian said residential property sector recorded transactions worth RM37.44 billion between January 2009 and November 2009, a decrease of 2.6 per cent and a decrease of 4.8 per cent in volume, compared to 2008. However, unsold units reduced significantly for completed and under construction homes.

Rosier 2nd Half for Johor

Developers in Johor Baru reported a rosier second half to 2009, according to property experts KGV-Lambert Smith Hampton, with a clear difference 2Q2009 and 3Q2009. The firm's Johor Director Samuel Tan pointed to low borrowing cost and innovative payment schemes, such as zero- cost packages, as playing a big role in encouraging a greater number of transactions.

Mr Tan, when presenting The Edge/KGV-Lambert Smith Hampton Johor Baru Housing Property Monitor for 3Q2009 in November last year, pointed to a change in developers' marketing approach, focusing increasingly on factors that add to a development's attractiveness, such as convenience, price and proximity to shopping facilities. Although there were not that many new launches as most developers were clearing unsold stock, the take-up was good as there was a limited number of units and buyers did not want to lose out.

Prices were maintained, but developers were also choosing to soft-launch their products first to test the market and scaling down the number of units for launch, he said, adding: “For properties tagged at RM700,000, we are looking at an average of 40 to 150 units launched and for those below RM200,000, it will be about 200 units.”

In Johor, terraced houses accounted for the highest number of transactions (12,428), compared to Kuala Lumpur, where condominiums made up the bulk of the transactions (9,021 condominium sold, vs 3,615 terraced units). From January to September 2009, take-up rates were moderate across Johor and Kuala Lumpur, but remained high in Selangor and Penang.

It will be interesting to see whether and how this profile changes in 2010 – bigger parcels being launched, or a shift in balance between landed properties and condominium developments.

Breaking New Ground – Literally and Figuratively

Most of the new projects were located within the Tebrau Corridor, where the purchasing power is the strongest. Nevertheless, of the 16 developments unveiled in Johor in 3Q2009, the KGV-Lambert Smith Hampton 3Q housing monitor highlighted two for special mention.

One was the high-end Ujana Executive Apartments by UEM Land Bhd, noteworthy for being located in the new area of Skudai and its guaranteed rental returns of a minimum of 14 per cent. The other is Mudra Tropika’s two-storey cluster houses, Nong Chik Heights, located on Malay reserve land in Johor Baru. It features a honeycomb housing design, ‘neither a terraced nor a semi-detached housing development’ but instead a cluster of homes around each other, promoting community living.

Caution in the Secondary Market

Says Mr Tan of KGV-Lambert Smith Hampton, the secondary market in Johor remained stable as investors and buyers continued taking a cautious approach. Popular areas included Taman Bukit Indah, homes along the Pasir Gudang Highway and particularly Bandar Baru Permas Jaya, near the Eastern Dispersal Link. Once more infrastructure works in Johor are completed, particularly in and around Iskandar Malaysia, more buyers should be attracted to the secondary market, he said.

What Lies in Store

Analyst Ho Chin Soon, director of Ho Chin Soon Research, sees the property market in Malaysia being on an upward trend for 2010. Prices of middle-class suburban properties, especially, will enjoy an uptrend, driven by the steadily rising FTSE Bursa Malaysia Kuala Lumpur Composite Index.

“However, the high-end and high-rise property market is still in a cautious mode with properties developed by branded developers expected to do well,” he said during a talk on “2010 Asian Equity and Property Outlook” in January.