Tan: The Johor property market has been showered with good news.
FOLLOWING the positive property market performance during the first quarter of 2024 (1Q24), experts are encouraged that the momentum is set to continue into 2Q24.
Savills Malaysia Sdn Bhd group managing director Datuk Paul Khong says the uptick in 1Q24 transactions signalled a good recovery in the local property market.
“We expect the encouraging performance in 1Q24 to continue into 2Q24 and beyond, with more developers expected to time and introduce new products into the market.
“Buyers will still need to be further enticed by new launches, as the developers sharpen their offerings further with attractive pricing and packaging, lifestyle concepts and offerings,” he tells StarBizWeek.
Khong expects many developers to attract younger buyers, providing offerings that are complete with promotional and flexible green financing packages, as well as various other innovative incentives.
“Local banks are also heading to a pro-borrowing stance, offering buyers more access to home loans and boosting overall demand,” he adds.
Additionally, KGV International Property Consultants executive director Samuel Tan also believes that the property market will continue to perform well in 2Q24, with Johor being a bright spot.
“The Johor property market has been showered with good news. This includes the initiatives for the Special Financial Zone (SFZ) and Special Economic Zone (SEZ); good progress of the rapid transit system (RTS); possible revival of the high-speed rail; the preliminary conceptualisation of the light rail transit and elevated autonomous rail transit from the private sector; as well as the announcement of many big-scale foreign direct investment (FDI) in Johor.”
Tan observes that developers have been building up landbanks in prime, centralised locations, as well as suburban areas in Johor, in anticipation of the market upturn.
“New launches of high-rise serviced apartments and condominiums in the Johor Baru central business district within proximity of the RTS stations have performed well.
“The demand for high-rise properties in the suburbs has also improved as many first-time buyers could not afford landed properties.”
Additionally, Tan says the industrial sector has also been attracting a lot of attention.
“With the formulation of the SEZ and SFZ, many Singapore-based companies will be keen to expand to Iskandar Malaysia to take advantage of the incentives that are yet to be announced.”
According to the Valuation and Property Services Department, the Malaysian property market recorded a 34.3% growth in 1Q24 compared to the previous corresponding period, with more than 104,297 transactions worth RM56.53bil, a 34.3% jump in transaction value.
In terms of volume, property sub-sectors recorded positive growth in 1Q24; the commercial sub-sector grew by 33.4%, residential by 16.6%, industry by 14.3%, agriculture by 13.7% and development land and others, 10.7%.
The residential sub-sector continued to dominate market activities with over 62,000 transactions, valued at over RM25bil, comprising nearly 60% of overall property market activities.
Meanwhile, houses priced at RM300,000 and below dominated the market with 33,500 transactions, comprising more than 50% of total transactions.
Tan says the year-on-year growth (in 1Q24) in both transaction volume and value was within expectations.
“This can be attributed to several reasons.
“Firstly, our economy has been recovering well post-Covid, with most businesses back to the pre-pandemic levels.
“Additionally, Malaysia has also managed to attract a healthy stream of FDI, hitting RM76.1bil as at March 2024 and RM329.5bil for 2023.”
Separately, Tan says he is upbeat on Iskandar Malaysia’s collaboration with Singapore on the SFZ and SEZ.
“These two platforms have the potential to be the game changers to transform the economic structure and property sector.
“Riding on the positive sentiment, buyers are more confident and will start to commit to big-ticket items.”
Commenting on the country’s 1Q24 property market performance, Khong notes that all sub-sectors performed relatively well, heading into 2024.
“We further envisage that the ‘cost-push’ elements are also getting stronger into the year, as higher costs of construction materials and the fuel subsidy rationalisation plan, will continue to push these base costs to ‘a level higher’.
“Thus, new stocks entering the market will be more competitively priced as the replacement costs will increase in tandem and the final impact herein will be passed on to the consumers.”
Khong nevertheless says he expects improvements in the job market, which will provide financial stability and confidence to potential buyers.
“This growth also suggests a revitalised interest in properties (including commercial), where investors are actively seeking for emerging opportunities.”
