Bridging two nations: The massive pillars being constructed across the Straits of Johor as part of the Rapid Transit System linking Johor Baru and Singapore. — Photo: Malaysia Rapid Transit System (MRTS) Sdn Bhd
WITH all the announcements of catalytic projects and the soon to be up and running Johor Baru - Singapore Rapid Transit System (RTS), we see prices of properties in the capital city of Johor moving northward.
For example, in the past, prices of service apartments hovered at around RM800 per sq ft (psf) to RM1,000 psf. Currently, the transacted prices are from RM1,000 psf onwards. For development lands, prices shot from RM600 psf to more than RM1,000 psf.
This uptrend is expected to continue as the Special Economic Zone and Special Financial Zone take shape in the fourth quarter of this year.
Moreover, when the high-speed rail is revived and the light rail transit project confirmed, the euphoria among investors will be unimaginable.
The million ringgit question is should investors put their money in the city or should they invest in properties in the suburbs?
Both offer advantages and disadvantages. Obviously, properties in the city are nearer to Singapore and will attract tenants from the republic. However, one has to bear with the usual congestion and higher property prices.
On the other hand, properties in the suburbs offer many advantages too, with some disadvantages.
Due to the lower land cost, developers are prepared to sell houses at more affordable prices within the suburbs.
Landed houses are often found in the suburbs. Double-storey terrace houses can be purchased from RM600,000 to RM1mil.
Developments here also offer a wider selection of property types ranging from single-and double-storey terrace, semi-detached, detached and clustered houses. Affordable apartments can also be found. These apartments are usually sold for less than RM600,000 for a typical unit.
A good example is the A-SoHo at Taman Johor Jaya. This new project comprises two blocks of service apartments atop a three-level retail mall.
The service apartments with floor areas from 400 sq ft to 650 sq ft with loft and dual-key layout received good response when it was opened for registration recently. All the units are priced below RM500,000 and are attractive to young couples and upgraders from that region.
The retail mall is positioned as a food and beverage hub. Some good brands have already expressed interest to open their outlets there.
Leisurely lifestyle
This is an important factor. After a day of hard work, all people look forward to is relaxing with their families and friends.
There are open fields for workouts and games. Cafes are aplenty. Quality lifestyle is an important aspect of life and is a strong selling point.
If these schemes are greenfield, it will be better as it will be better planned. Such greenfield developments include schemes in Iskandar Puteri. These are popular among the foreigners who like things to be modern and well-planned.
New housing schemes are usually gated and guarded. Incidences of theft are rare. Most developers employ their own security guards to ensure the safety of the residents.
Safety features such as CCTV and 24-hour police or ancillary police patrolling are offered by the developers.
Some of the essentials are like neighbourhood shopping malls, schools, transportation hubs, hotels and markets are available in the suburbs.
These conveniences make life so much easier for the busy housewives. Driving time to these places is often within 10 minutes. With such amenities, much time is saved and this is important for a hurried society where time is a priceless commodity. With better management of time, there will be increased productivity.
Many employment centres like industrial parks and shops are often sited away from the city centre. Suburban housing is nearer to them and hence with less travelling needed, it is another advantage.
The trend of working from home makes living near the city less attractive. Workers can enjoy the comforts of the home and yet do their tasks while living in the suburbs.
All investors look at potential capital appreciation as one of the important considerations in property investment.
Suburban housing fits the criteria as there are more houses to choose from. Many of them buy for their own occupancy and this results in a more stable price movement.
Finding tenants is also easier as they also look for places that offer these amenities.
The disadvantage is mainly the longer travelling distance to the city centre. However this is not an issue if one’s working place is near to their home.
Connectivity is crucial
Good connectivity is imperative to ensure seamless transportation.
In Johor Baru, the Iskandar Bus Rapid Transit will soon be implemented. The three routes are from the city centre to Iskandar Putri; to Skudai and to Tebrau. Feeder buses will then run to the housing schemes. This project will cover 90% of the Johor Baru district.
In the past, staying outside the city was perceived to be less prestigious. This perception has changed.
Many schemes are very popular.
Among them are Horizon Hills, Senibong Cove, Leisure Farm, Austin Heights and the surrounding schemes, such as Bandar Dato Onn, Taman Sutera Utama, Taman Bukit Indah, Bandar Permas Jaya and of course schemes in the Iskandar Putri area.
Even foreigners choose to reside in these areas. Most of these are self-contained townships.
The choice of investing in the city or in the suburbs is also a function of budget. One needs to weigh various factors before a definite decision can be made.
Real estate is an inelastic commodity. Prices can only move upwards due to increasing land and building costs.
Labour and compliance costs will compound this matter.
Even though property prices will fluctuate due to the usual property cycles, in the long term, prices will move upwards. History has proven it.
Samuel Tan is the executive director of KGV International Property Consultants. The views expressed here are the writer’s own.
