“The sprouting of Chinese investors in Malaysia is in tandem with the Government’s initiative to make Malaysia an international real estate investment destination. Chinese developers have been investing in blue chip locations of New York, Los Angeles, London, Sydney, Singapore and their presence in Malaysia bodes well for the market,” says Zerin Properties chief executive officer Previn Singhe.
Previn is unperturbed on the potential flooding of homes in the future as the supply coming in will be spread over a couple of years. “Once all the catalytic projects are in place, there would be requirements for new homes to accommodate migrations,” he says.
Although rumour has it that Country Garden has been offering its Chinese buyers a deal that packages a unit in Iskandar together with a purchase of their property in China, it is insignificant to pushing up prices in the area, says V. Sivadas, executive director of PA International Property Consultants Sdn Bhd.
As local and foreign developers grapple and challenge for customers when launching projects in Iskandar Malaysia, the surge in supply coming in has been startling.
The slew of houses slated to be built together with a market that is taking a breather after seeing a uprush in prices and cooling measures starting to bite has seen takeup rates of new developments almost grind to a halt.
Post Budget 2014, take-up rates have come in poorly with developers like UEM Sunrise Bhd recording only 20% in bookings for its latest project Almas Suites – a small office home office development in Puteri Harbour.
The project, which comprises 526 units, has reportedly only completed a measly four sale and purchase agreements.
“In any case, competition in a growing market such as Iskandar Malaysia, is a good thing – it keeps all of us on our toes and ensures that property buyers have a wide variety of products to choose from.
As we all strive to improve, greater value will be created for our customers, investors and end users,” says Eco World Development Group Bhd chief executive officer Datuk Chang Khim Wah in an email reply.
However, this year could look bleak for developers as they are bogged down with a decline in sentiment brought about by the cooling measures such as the increase in real property gains tax, as well as the abolishment of the developers interest bearing scheme, introduced in the latest budget.
Also, policies such as the change of the weekend differing from Kuala Lumpur and Singapore has caused a negative knee-jerk reaction, resulting in many developers and buyers adopting a wait-and-see attitude.
While many still believe in the Iskandar story, the success of it will largely depend on the movement of international businesses setting up shop in the area, which is reliant on how fast infrastructure there improves, which experts say has not really kicked off as yet.
As for now, demand for high-end condominiums remain largely speculative as Iskandar Malaysia still lacks critical mass, Hwang-DBS says.
