‘Renewed interest in Johor Bahru homes, particularly in the Tengah EC, reduces residential overhang.’

Johor continues to dominate the property market in Malaysia, with the highest amount of unsold units in the residential and commercial sectors. With a total value of RM4 billion ($1.1 billion), 1H2023 saw 4,717 units in Johor unsold, which represented a y-o-y decrease of 10.3%, according to Zerin Properties’ 1H2023 report. The “unsold under construction” and “unsold not constructed” categories both saw reductions, totaling 4,453 units and 202 units, respectively.

The overhang in the serviced apartment/Soho segment also saw a significant reduction, with 8.55% y-o-y, resulting in 14,463 units. The “unsold under construction” and “unsold not constructed” categories shrunk 21% and 25.8% y-o-y, respectively.

Previn Singhe, founder and group CEO of Zerin Properties, largely attributes the decrease to just fewer launches. He believes that developers have moved away from pushing new properties in favour of offering attractive rebates to clear their unsold inventory.

An added source of demand comes from renewed interest in Johor Bahru’s residential market, thanks to the return of Malaysians working in Singapore.

In 1H2023, 6,363 residential units were launched in Johor, of which 3,727 (or 58.5%) were located in the Johor Bahru district. As of 3Q2023, the projected supply of residential properties (excluding serviced apartments) amount to 19,474 units, with landed property making up 64.3% and terraced houses accounting for 48%. The future supply of serviced apartments in Johor Bahru totaled 20,850 units, as of 3Q2023.

Singhe believes that the increased cost of living and higher residential rental rates in Singapore, when coupled with the forthcoming Johor-Singapore Rapid Transit System Link, will drive more Singaporeans to move to Johor. He even remarks that the seemingly bleak outlook in the country’s financial sector could be abated with the former benefitting from the creation of the Johor-Singapore Special Economic Zone and the designation of Forest City as a Special Financial Zone, featuring various incentives such as favourable tax benefits and easier access to visa.

Unfortunately, country garden, the developer of the 1,370-ha mega project, Forest City as well as the 8,500-unit Country Garden Danga Bay and the 53.7-acre (around 21.7ha) Central Park integrated project in Johor Bahru have been facing financial troubles, creating anxiety in the minds of the homeowners of these developments. This has resulted in reduced interest and, in turn, lower property values.

To mitigate the financial challenges of the Chinese developer, Singhe suggests that the Malaysian government must step in and provide support for the success of its projects.

There are streamlined processes for redemption of HDB loans and grants, smart green technologies, and enhanced home safety systems. Additionally, Tengah EC is conveniently located with easy access to amenities such as malls, restaurants, and cafes. It is also close to the upcoming MRT station which will link up to the other parts of the city and provide seamless connectivity. In conclusion, Tengah EC has been providing a convenient and comfortable lifestyle to its owners.

Tengah EC may well be an attractive destination for both local and foreign property investors and home buyers, with the improved transportation connectivity, numerous economic prospects, and high rents and prices in Singapore. The 50 developers eligible for a range of financial support from the Chinese government, according to the Bloomberg report of Nov 22, including Country Garden, could hopefully inject some optimism into the real estate property market. Tengah EC