Have Singaporeans lost interest in Johor property?

A local daily recently published an article entitled: “Waning Singaporean interest in Johor property market.”

The article quoted a few Singaporeans who bought properties in Johor a few years ago. One said he was getting a lot more space and value for his money. However, he regretted the decision because of the daily crawl into Singapore every working day.

(Now, hopefully everyone realises that the Rail Transit System (RTS) instead of the HSR KL–SG would benefit the Johor Bahru property market more.)

Another person quoted in the article said, “Investing in an overseas market is riddled with challenges – asset management, forex, taxation, familiarity of environment.”

Good reasons indeed. That’s why it’s much more advantageous to buy in Johor Bahru versus some other countries. Even when there is a crawl, it’s heartening to know that your property is just one or two hours away and not many hours away by flight.

Another source in the article, who declined to be named, said property interest in Johor peaked in 2013. The reason was because of interest-bearing schemes, or deferred payment schemes that were later banned in 2014.

It was also mentioned in the article that a Singapore Cabinet minister cautioned Singaporeans against investing too aggressively in Johor in 2015.

Then, the same reason was mentioned. “The worsening traffic congestion at the two land crossings in Woodlands and Tuas has also put off many Singaporeans from buying and living in Johor.”

This was what Cushman & Wakefield Singapore’s senior director and head of research Christine Li said: “A better Singapore housing market has put the investment spotlight back to the home market. Johor Bahru properties are also competing with those in Bangkok and Cambodia.”

Competing with Bangkok and Cambodia? It is hoped Singaporeans will have the opportunity to compare as many property markets as possible before they invest. No harm and perhaps better too.

There’s even a bullish comment at the end – “A strong and stable Malaysia is good for Singapore, as we ride on and benefit from each other’s strength. It’s the same argument for a strong and stable China. Big countries are like the tides. When the tide goes up Singapore moves up and when the tide comes down, we come down. This is the reality of today’s social and economic dynamics. Countries big or small are interconnected.”

The interest from Singaporeans on Johor Bahru properties are not that high when compared to these two other groups. The “higher interest” will definitely be coming from Malaysians working and staying in the smallest rooms in a HDB flat currently and paying S$700 (RM2,100) for it every month.

The reason for them staying there is definitely not because they love those small rooms but the convenience of getting to work on time.

It will also come from Malaysians in Johor Bahru because when the RTS starts, the rental market for non-Johorean Malaysians working in Singapore will start increasing as well.

Hopefully, Johoreans will be the ones buying first instead of KLites, who are already seasoned property investors.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.