KUALA LUMPUR, May 11 — Singaporeans are becoming more “wary” of buying properties in Johor amid fear of an impending property oversupply in Malaysia’s southernmost state, a board member in the Monetary Authority of Singapore (MAS) said.
The member, Lawrence Wong, noted that close to 336,000 private residential properties are currently under construction in Johor, according to Malaysia’s National Property Information Centre’s latest statistics.
According to news portal TODAY, the number of these soon-to-be launched properties in Johor already exceeds the total number of residential properties in Singapore, which has a population size of around 5.47 million.
Beyond the 336,000 new housing units in Johor, Wong also pointed to the expected development after 2020 of 1,400 hectares of reclaimed land near the second link between Malaysia and Singapore.
“Given these indications, there are many reports indicating that buyers are becoming more cautious. Official Malaysian data suggest Johor housing market is already slowing down … Singaporean buyers too, are becoming wary.
“According to a survey of real estate agencies, the number of Malaysian properties bought through these agencies dropped from 2,609 in 2013 to 838 in 2014,” Wong, who is Singapore Minister for Culture, Community and Youth, was quoted saying by TODAY.
He was responding to a parliamentary question on the number of Singaporeans who have purchased properties in Johor’s economic region Iskandar Malaysia.
According to TODAY, Wong said the Singapore government will work to increase awareness on the risks of buying property abroad.
The portal said Singaporean property buyers had last week complained to the Consumers Association of Singapore (CASE) and urged the government to review requirements for information disclosure by developers overseas in advertisements.
Last month, Maybank warned in a research report that the existing housing oversupply in Johor’s Iskandar region could be worsened by the expected new units to be delivered within these two years, saying that property values would be under greater pressure in the medium term.
The report said the value of property transactions in Johor had dropped by 33 per cent in last year’s fourth quarter when compared against the previous quarter, with its prices also dropping more at 1 per cent than those in the whole of Malaysia at 0.2 per cent.
“We remain cautious over the increasingly crowded development space in Iskandar Malaysia and think the oversupply situation is likely to get worse... This will be aggravated by ample incoming supply by end-2015 and 2016 from units which were launched during Iskandar Malaysia’s peak time in 2012 and 2013,” the Maybank research note said.
On April 20, Malay Mail Online reported that Johor lawmakers have pointed out that the reality is demand has not caught up with the state’s supply of premium residential and commercial properties.
