Challenging times ahead for Johor property market

PETALING JAYA: The Johor property market is expected to be challenging this year with buyers taking a wait-and-see attitude in view of national and global uncertainties.

KGV Property Consultants executive director Samuel Tan said developers have to match expectations by building houses priced between RM250,000 and RM400,000.

Tan defined standard housing as those in that price range, while deluxe will be between RM400,000 and RM800,000.

Luxury range is RM800,000 and above. “Demand will be higher if developers are able to build more standard units but they will find it tough to do so,” Tan said.

The state government defines affordable housing as those priced RM150,000 and below but this is very challenging for developers, Tan said.

The other facing the Johor market is high number of unsold units under construction.

While this does not come under the National Property Information Centre’s definition of overhang as these units are still under construction, Tan said these large number of unsold units are worrying.

Both developers and the government may need to consider how to clear this unsold stock which numbered about 33,000 out of about 85,000 units under construction as at June 31 2017.

Tan said the state government may consider lowering the RM1mil cap that foreign buy- ers are subject to.

Tan also suggested the earlier release of bumiputra units, waiver of consent fee of 2% or RM20,000 whichever is higher.

The state government may also want to encourage en bloc sale of serviced apartment blocks and even converting entire blocks into short-term-stays market like AirbnB.

Tan said more rebates and other incentives may be needed for developers to clear unsold stock.

On Johor’s overall residential market, he said the secondary market may fare better than buying direct from developers but the issue here is buyers have to fork out more upfront money.

“Therefore, Johor housing is challenging,” Tan said.