Residential prices in Johor fell in Q2 2014, marking its first decline in over two years, according to a report from Maybank IB Research, which cited the state’s House Price Index (HPI).
Although the overall index was 4.6 percent higher on an annual basis, it dipped by 1.6 percent compared to the previous quarter. Specifically, prices of high-rise condos fell by 13.5 percent from Q1 2014, after the state was inundated by such properties in recent years.
Maybank IB Research Analyst Wong Wei Sum explained that the price drop is attributed to property curbs imposed by the Malaysian government starting from January 2014.
One example is the RM1 million minimum price for foreign property buyers that was introduced in May from RM500,000 previously.
In addition, the demand for newly launched properties softened in Q3 2014.
For instance, he noted that only 46 percent of the 1,488 apartments under the first phase of Princess Cove by Guangzhou R&F were reserved as of 30 September after it launched in July, while the take-up rate at Almas condominium by UEM Sunrise was merely 25 to 30 percent.
Given the huge amount of upcoming supply by end-2015, residential prices are expected to remain weak or flat in the medium term, especially for mixed-use and high-rise developments, said Wong.
In terms of supply, 18,718 units of high-rise apartments are expected to enter the market by end-2015, with an additional 40,374 units by end-2017, revealed a study by Landserve.
Furthermore, Iskandar Waterfront Holdings reportedly plans to sell some of its land in Permas Jaya or Danga Bay to several foreign developers. If this is true, the supply of residential properties in Iskandar could increase further, Wong added.
