Iskandar property prices in a tizzy

THE last six months have seen a tremendous spike in property prices in Iskandar Malaysia, one of Malaysia's most successful economic corridors, with interest and imagination fired by warming of government ties between Singapore and Malaysia and the completion of several infrastructure projects.

While agents from both sides of the Causeway say they have never seen such a steep climb in interest the last two years, it is the last six months that have taken their breath way. Everything, from price to density; to interest from foreigners, has been strastopheric.

How much of this is hype and how much of it is for real?

Although there have been occasions where agents have been “overly optimistic” and exaggerated sales numbers, Jones Lang LaSalle head of residential project sales David Neubronner says they are seeing more enquiries in recent months, stronger buying interest and rising capital values.

Show houses and apartments in Iskandar are busy even on weekdays. Good Malaysian property launches in Singapore draw in full houses, says Neubronner who is based in Singapore.

Robust demand is evident in popular developments such as Senibong Cove and Straits View Residences where both have sold out all their previously released landed properties.

“Visitors to their show-houses have to register their names with their agents for future releases and at higher prices,” says Neubronner.

On the residential front, Nusajaya is hoarding the limelight with the slew of initiatives and developments coming on board. Of particular interest, and rightly so, says Neubronner, is the Puteri Harbour scheme which boasts of a variety of opportunities such as luxury waterfront villas, apartments, serviced residences, hotels and commercial developments.

The other attractions are the new international schools in Nusajaya, like the world renowned Marlborough College. This has caught the attention of the expatriate community in Singapore and many are making enquiries, says Neubronner.

Other hot areas are waterfront homes in Danga Bay and Permas Jaya.

“Iskandar is a big scheme and waterfront homes stand out for its exclusivity and lifestyle concepts,” he says.

Taking a retrospective view from the Johor side, CB Richard Ellis (Johor) Sdn Bhd director Wee Soon Chit compares today's prices with June 2012 and as far back as 2006 when Iskandar was first launched.

In 2006, vacant bungalow lots in Ledang Heights were priced at RM25-RM30 per sq ft. In June 2012, it was RM60-RM80 per sq ft. Today, it is between RM100 and RM120 per sq ft.

“There seems to be very strong interest and an element of speculation,” says Wee, adding that he has never seen such a dizzying spike in his 17 years in the property market.

“Property prices have been rather stagnant since 1998 to around 2006. The hike in property prices especially over the last two years has been phenomenal and cuts across the board for the sub-segments of the market.”

Industrial prices in the Southern Industrial Logistics cluster UEM group in Nusajaya were hovering at RM25 per sq ft in 2006. By June 2012, it doubled to between RM40 and RM50 per sq ft and today, lots are transacted as high as RM75 per sq ft.

As for commercial land in Johor Baru, known as the old town, Wee says the latest transaction for a yet-to-be converted parcel fronting Jalan Abdullah Tahir was sold for RM380 per sq ft (June, 2012: RM280 to RM300 per sq ft; 2006: RM180 per sq ft).

In Nusajaya, at least 60% of buyers of residential properties are foreigners compared with 40% in Johor Baru. Prices of high-rise units launched two years in 2006/07 have moved from RM350 psf to RM1,200 per sq ft.

Wee says it is not really “an apple to apple comparison” because they are now seeing better finishes and designs.

Wee says he is naturally concerned about the price spike. By 2013, at least 10 blocks will be completed and by the end of 2014, between 20 to 30 blocks.

“All in all, we are talking about 70 to 80 blocks of new high rise developments,” he says.

But despite in influx of projects, more seems to be on the way, he says. Nearly all the big developers from Kuala Lumpur are there, and likewise the big developers from Singapore like CapitaLand, Temasek and Maple Tree group. - The Star