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Johor Real Estate Heatmap

REENA KAUR BHATT explores the top residential hotspots in Johor and speaks to experts to find out what prospective home buyers and investors should look out for.

By The iProperty.com News Team on Mar 31, 2017

Latest data from iPropertyiQ showcases transaction activities, median prices and capital growth for terraced homes and apartments across Johor. Here are the recorded figures with an analysis of the findings:

Eric Tan and Samuel Yong

TERRACED HOMES

Top 5 Most Transacted Areas (Sept 2015 - Aug 2016)

 

FINDING 1 - Skudai recorded the highest transaction for terraced homes at 953 sales, with Kulai coming in second at 804.

Samuel Tan, Executive Director of KGV International Property Consultants explains that Skudai and Kulai have always been popular with the locals. In the 1980s-1990s, many residential villages sprouted around these 2 towns and as time evolved, modern housing estates were soon developed there. Thus, resulting in many existing residents upgrading to these newer homes coupled with strong demand from children who grew up in these areas and are now forming their own households.

More employment opportunities are found here too as these two areas continue to develop.  They will continue to be hotspots as the radius of Skudai’s development progressively moves outwards and merges with that of neighbouring Iskandar Puteri (IP), which houses Johor’s new administrative centre, Kota Iskandar. An example of housing schemes overlapping into IP is the Taman Bukit Indah project, which is experiencing high take-up rates in terms of sales and rental.

Eric Yong, Branch Manager at Arborland & Co (Johor) Sdn Bhd agrees that Skudai and Kulai’s popularity is here to stay as homes in these areas will continue to cater to significant demand from young families and new couples. Eric believes that the demand will be sustainable regardless of any fluctuation in the economy, especially for Kulai which will be housing quite a few large-scale industrial projects in the near future. In turn, the incoming working population will further stimulate the demand for homes in the area.

FINDING 2 - The average price per sq ft for terrace homes in Tebrau at RM329 329 is catching up with homes in Johor Bahru (JB), where the figure tops RM335.

Samuel notes that over the last decade, both commercial and residential developments had decentralised to the suburbs, with Tebrau being the prime example. Formerly a sleepy town, the Tebrau corridor is now an up and coming suburb - with various residential developments in the area including Taman Pelangi, Century Gardens and Taman Mount Austin. These housing schemes are made all the more appealing to homebuyers with the many supporting amenities built in the area. These commercial components include Aeon and Jusco Tebrau City, Hospital Sultan Ismail and the Starhill Golf & Country Club. In addition, IKEA is set to join Tebrau’s retail landscape by the end of this year.

Eric comments that more Johoreans now prefer to stay in self-containing suburbs located close to the city centre. With Johor Bahru just 15km away, Tebrau meets the ‘family living’ requirements while ensuring a convenient commute for those who work in the city centre.

FINDING 3 - Pasir Gudang has always been known as an industrial town/area as it houses its own port and many factories are located there. However, the past year shows that Pasir Gudang was the area with the highest capital growth for terrace homes at 23%.

According to Samuel, the growth in capital appreciation is mainly attributed to the recently completed Eastern Coastal Highway (ECH) aka Southern Link. Prior to this, travelling from Pasir Gudang exceeds an hour during peak hours; the new expressway reduces this figure to just 20 minutes. Concurrently, a few major developers have ventured into the area with township developments, attracting a burgeoning number of home buyers with its attractive unit prices. This includes Mah Sing with its Meridin East project, EcoWorld Development Group’s Eco Tropics township and Taman Scientex by Scientex Berhad.

LANDED PROPERTY MARKET MOVING FORWARD

Whilst the overall property market tempo may slow, Samuel believes that landed homes in Johor will still experience activity growth, as the buyer demographic shifts from the higher-end segment to mid-priced homes, in line with the rakyat’s affordability.

Opportunities will surface for first-time house buyers as well as those with a lower budget as many developers are restrategizing their development plans in cognisance with the current economic slowdown. New launches bear prices which fall within the locals’ reach. Notwithstanding the above, niche landed properties will continue to do well as it caters to well-to-do buyers looking for comfort and prestige.

Eric also notes that the demand for landed residential property in Johor is still strong, especially for homes costing below RM600,000 and located within gated and guarded developments. The sub-sale market especially is ripe for the picking as it offers numerous good deals for the aspiring home buyer.

APARTMENTS

Top 5 Most Transacted Areas (Sept 2015 – Aug 2016)  

FINDING 4 - Unsurprisingly JB tops the list for apartment sales while Masai recorded the second highest transaction activity for apartments at 179.

Samuel shares that apartments only became popular among JB home buyers in the mid-2000s as the city centre’s population peaked, leading to the construction of higher-density residential developments due to land scarcity. As it got pricier for developers to construct landed homes in JB, the local development plan was also altered to allow for a higher plot ratio for high-rise projects, thus leading to the mushrooming of stratified developments across JB. The emergence of foreign developers also contributed to the increase in apartment supply.

Meanwhile, apartments in Masai are popular for a different reason – With a median price per sq ft of RM200, most of the available units fall within the affordable range.  Most are built with the mid and lower income group in mind, especially those who cannot afford to purchase landed homes.

Eric adds that the many factories located nearby also adds to the demand for these high-rise units, as investors could obtain high rental yields with the low entry points.

FINDING 5 - Skudai far surpassed other areas in terms of Y-O-Y capital growth, at 17%.

Sharing his reasoning for the trend above, Samuel says that the Skudai has benefited from the spillover effects of its neighbours, namely Iskandar Puteri, Senai and Johor Bahru. Also, most of the newer apartments deemed to be in Skudai actually borders or overlaps the three areas mentioned. These include developments in Taman Perling, Taman Bukit Indah and Taman Nusa Bestari. Nevertheless, these self-contained townships are attracting a growing number of family occupiers as they boast a full range of amenities and conveniences.

Skudai also provides easy access to the Woodland Causeway and the Malaysia-Singapore Second Link. Many who work in Singapore choose to live here due to the proximity and ease in daily commute.

Eric shares that ongoing developments in the area have contributed to the capital appreciation growth – these include Paradigm Mall along Jalan Skudai, Capital 21 along Jalan Tampoi, which is slated for completion in early 2018 and Mydin Mall Mutiara Rini, to open its doors sometime this year.

FINDING 6 - Permas Jaya’ apartments had the highest median price per sq ft at RM301, slightly higher than JB’s apartments.

Samuel explains that the many new developments in the area have contributed to the rise in the average price PSF of apartments in Permas Jaya. These new projects such as Greenland Tebrau which bear higher price tags inevitably pushed up the prices of the existing apartments within the locale. Permas Jaya is also rising steadily as a property hotspot due to its strategic location in between JB and Pasir Gudang. Also, with the new Permas Bridge connecting to the Eastern Dispersal Link (EDL), it only takes roughly 10-minutes to drive to the JB CIQ; thus making Permas Jaya a favourite among those working in Singapore.

Eric believes that the sub-sale market in Permas Jaya is seeing robust activity as the apartments there are newer and offer better facilities than its counterparts in Johor Bahru.

HIGH RISE PROPERTY MARKET MOVING FORWARD

Samuel believes that the new completions of high-rise properties in the next 2 years will pose a challenge in terms of take-up rates and tenant occupancy due to the influx of supply. However, the negative impact may be mitigated by the fact that new development applications for serviced apartments in the state have been frozen since 2014. The Rapid Transit System (RTS) will also revolutionise the demand pattern for apartments in the city; however, a significant increase in demand will take a while to happen.

In the meantime, serviced apartments are expected to go through a rough patch, as the higher cost deters a majority of buyers looking for value for money deals. Nevertheless, this presents an opportunity for financially stable buyers who can snap up discounted units. 

Concurring to this, Eric says that developers are offering attractive packages for new high-rise developments in order to clear off their unsold stock; a boon to young buyers looking to fulfil their home ownership dream.  

On the other hand, Eric points out that some areas in Johor are actually experiencing a lack in apartment supply, in neighbourhoods such as Kulai, Masai and Batu Pahat; the demand from homebuyers outstrips the current stock in the market. He anticipates that more developers will be planning to build more affordably-priced high-rise units in these prime areas in tandem with the growing demand.

 

DISCLAIMER: The source of Sale data is from the Valuation and Property Services department (JPPH) which officially records a property transaction once the stamp duty for the Sales and Purchase Agreement is paid while the source of rent data is from agents’ listings listed at iProperty.com. Analytics are based on the data available at the date of publication and may be subject to revision as and when more data becomes available.