Cautiously optimistic outlook with property developers in Iskandar expecting tough 2014

  • Property
  • Wednesday, 15 Jan 2014

JOHOR BARU: The “feel-good” factor that was prevalent in 2012 and 2013 for the property market in Iskander Malaysia is unlikely to continue this year following property cooling measures introduced by the Government in the last quarter of last year.

Property developers are rather cautiously optimistic on the market outlook for 2014 and are anticipating it to be a tough year for many.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Koh Moo Hing said the Year of the Horse would be more challenging and that developers must be well-prepared to face the worst.

“I assume that many of our members will adopt the wait-and-see approach in the first-quarter of 2014, to see the real impact from the (property cooling) measures,’’ Koh told StarBiz.

He said the measures were not something new as other countries would also resort to similar measures to ensure locals were not sidelined and denied from owning houses.

Koh said 2013 was the best year for 30 odd members of Johor Rehda who participated in the Malaysian Property Exposition (Mapex) held here in May and November.

He said these members raked in a combined RM3bil in sales over a one-month period.

“It would an achievement if they could repeat the sales figure again for this year’s events,” he added.

The 30-day period starting from the first day of Mapex is the benchmark used by Rehda to determine the value of sales by participating developers.

“Johor Mapex to be held in April will give a clearer picture on the Iskandar property outlook and how developers are coping with the uncertainties and challenges,’’ said Koh.

He said developers would be ready to face the tough year ahead and adapt well as they had experienced the ups and downs in the industry over the years and emerged stronger. Koh said that speculators would be phased out gradually from the property market with the implementation of the measures with owner-occupier buyers dominating the market. “This year’s launches will see between 100 and 200 units with more developers opting for landed houses as demand for them is still strong in Iskandar,’’ he said.

KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng concurred with Koh that the market would see more serious buyers.

But he said buyers would be more cautious on the new policies – the real property gains tax (RPGT) and the hike in ceiling price from RM500,000 to RM1mil for foreign property buyers.

“Prices of houses will continue to go up this year, determined by the policies and escalating costs of labour and building materials,’’ said Tan.

He said it was matter of time buyers especially first-time house owners decided whether to continue waiting or make the kill before the prices move up north.

Tan said if the prices continued to go up, more buyers would go for the secondary market where prices were between 20% and 30% cheaper compared with new launches.

“For instance, the average selling price for a new double-storey link house in Iskandar is RM800,000 per unit, but if you look around in the secondary market, you’ll be paying RM600,000 for it,’’ he said.

Tan said landed houses in the secondary market came with generous land size and bigger floor area plus ready amenities and facilities within the neighbourhood or the development.

He said if this could prompt developers to lower the selling prices of their new launches to attract potential buyers and also offer no-frills houses to cut costs.

Tan said foreign buyers would continue to buy properties in Medini, Nusajaya as there was no restriction to foreign ownership in the area and they were not subject to the RPGT regime.

SP Setia Bhd divisional general manager Hoe Mee Ling said many uncertainties in both global and domestic market might affect the property market in the first-half of 2014.

She said among the issues were the pressure of increasing costs as a result of skilled labour shortage, reduction in subsidies beginning with petrol last September and electricity tariff adjustment in 2014 and policy changes.

“However, challenges always come with opportunities and there are still positive factors in the Iskandar property market,’’ said Hoe.

She said the fundamental demand for properties in Iskandar would remain high and strong as long as developers could adapt to their products to suit this demand.

Hoe said the outlook was still good as properties fetched good yields and were the best hedge against inflation.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Stories You'll Enjoy