PETALING JAYA: The entry of developers from China into Iskandar Malaysia is increasingly being felt and will intensify the competition in the region, according to Maybank Investment Bank Research.
The research house expressed its concern that the developers could flood the market with massive supply of high-rise mixed development projects, inducing price volatility.
It said this could happen if there were no synchronised planning and control by the authorities.
A local analyst reckoned that competition would heat up in the Iskandar region owing to the presence of not just these developers but also most of the major property players.
He said he expected property prices at Iskandar Malaysia to be sustained by the proposed transportation system such as the Singapore-Kuala Lumpur high-speed rail link.
Just weeks earlier, China-based developer Guangzhou R&F Properties Co Ltd bought six plots of land in Johor Baru for a whopping RM4.5bil from the Johor Sultan, making it a record deal.
Then another developer from China, Country Garden Holdings Co Ltd, bought 22.26ha in Danga Bay for RM376 per sq ft.
This was followed by news of Singapore-based company Hao Yuan Investment Pte Ltd (which is believed to be a China-linked company registered in Singapore) entering into a joint venture with Iskandar Waterfront Holdings (IWH) to jointly develop 15ha in Danga Bay.
Maybank said in 2013, Country Garden’s “all in one go-style” of selling its 9,000 apartments at Danga Bay (in less than a year since land acquisition) had raised eyebrows of local developers.
“Our ongoing discussions with local developers reveal that many have turned cautious on the short-term outlook of the Johor property market, especially in the overcrowded mixed use and high-rise residential project space,” it added.
Meanwhile, Maybank has maintained an “underweight” on the property sector and expects the property market to be hit hard by the new property cooling measures of Budget 2014 as well as by some state governments.
In addition, it said stricter mortgage lending by the banks would also slow new transactions.
“Developers have already expressed caution on the property market outlook over the next six months and are switching their product focus to affordable housing, where demand is still resilient and supported by a young demographic,” Maybank said, adding that its only pick in the sector was Glomac Bhd.