Sunday, April 26, 2009

Lower-priced landed homes in Johor

Investors or people looking for retirement homes in Johor should be able to find attractive buys in the Malaysian state.

Mr Ivan Hoh, executive director of PropNex International, said Johor's proximity to Singapore makes it an attractive destination.

'Many aspire to own a landed property in Singapore which they can't afford, so the other alternative is to buy a house in Johor,' he said. \

There is generally more demand for landed homes than condominiums in Johor, he added.

'As they have vast land, many prefer to live in a house with land versus paying a more hefty sum to live in a condominium. For about RM250,000 (S$104,000), you can get a decent terrace house of 1,500 sq ft. A condominium in a good location will cost at least RM350,000.'

Indeed, the lower prices compared with similar properties in Singapore are a huge draw.

Mr Lim Boon Ping, an agent with Johor-based Tiram Realty, said: 'Compared to Singapore or even other parts of Malaysia, Johor Bahru residential prices remain very attractive, thus making it a relatively cheap place to reside in.'

He cited the example of a single-storey terrace house in Taman Johor Jaya with a built-up area of 761sq ft.

'At its peak in 2006, transactions hit RM170,000 for a unit. Now, you can easily purchase one at around RM120,000.'

Knight Frank Research showed that 'movement of prices has been flat with no significant changes (in Johor's residential market)...the market is stable and does not show any sign of a 'bubble' scenario'.

Knight Frank also said rental rates and yields, which hover around 4 per cent to 5 per cent, are expected to come under pressure and show some downward adjustments in the near term.

Mr Hoh said: 'In terms of rental yield, a house in general will not be able to fetch as high a yield when compared to a condominium.

'As property prices have crept up over the years and rental rates stand still, the yields in Johor remain low, probably 3 per cent or 4 per cent.'

Malaysian property giant SP Setia has some projects in Johor.

Its Setia Indah project, for instance, has a range of units called the 180 Degree II. These are double storey terrace houses with a land area of 1,540 sq ft each.

Prices start from RM304,800. The development is expected to be completed in September.

SP Setia will soon launch Setia Eco Gardens, an eco-friendly development near the Second Link in Tuas. Its Visellia terrace units will have a built-up area of 1,926 sq ft onwards and are priced at $138,000 each.

Mr Eric Cheng, executive director of HSR Property Group, said of Johor: 'Singaporeans will have to drive only 10 or 15 minutes to get there on a weekend, and they will probably own a bigger land plot.

'But I think a true investor should wait and see. I think (they should) give themselves another good six months for the market to stabilise; I think it's still too early to judge.'

Source: Straits Times, 26 April 2009

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