JOHOR BAHRU, Feb 15 — Some residents of the state capital here say they are being “priced out” of their own city, particularly in downtown areas, as the strong spending power of cross-border shoppers from Singapore drives up prices for everyday goods and festive items.

This phenomenon, dubbed “Singapore pricing,” has led to a noticeable pullback in local spending this Chinese New Year season, The Straits Times reported.

Retailers at several festive bazaars said that “business is slow,” with many locals choosing to shop at budget-friendly suburban hypermarkets, browse on e-commerce platforms, or simply buy less altogether.

“We don’t plan to spend much... I think on the last day when the shops start to lelong (offer fire-sale discounts), the prices will be better,” said business owner William Sim, 32, while browsing a bazaar with his family.

Even with Singaporeans making up the majority of their customers, vendors are feeling the pinch.

“There are many people here... but look at their hands! Not many are buying,” said festive snack vendor Maxx Tee, 30.

The economic drivers

Economists explain that this is a predictable spillover effect.

“When the Singapore dollar is stronger than the ringgit, items sold in ringgit are seen as cheaper by Singaporean buyers, but expensive for locals,” said Noranita Abdamia, a senior economics lecturer at Universiti Teknologi Mara.

“In the long run, higher prices will become normalised, while the local wage is not increasing at the same rate.”

This is compounded by Johor having the highest inflation rate among Malaysian states at 2.3 per cent in December 2025, well above the national average.

Sunway University economics professor Yeah Kim Leng added that domestic factors are also at play.

He said businesses are raising wages and prices in anticipation of the Johor-Singapore Special Economic Zone (JS-SEZ), as they compete for workers ahead of expected investment.

The JS-SEZ and the upcoming Rapid Transit System (RTS) have already fueled a property boom in Johor Bahru, further driving up costs.

A double-edged sword

However, the tide may be turning slightly.

With the Malaysian ringgit strengthening against the Singapore dollar recently, even cross-border shoppers are becoming more discerning.

“Even for Singaporeans and locals who earn Sing dollars... perhaps now they are also comparing,” said Johor Bahru Small Businesses Association president Tey Tian Hwang.

“With the exchange rate dropping... is it really worth driving to JB to shop rather than shopping in Singapore?”