Developers face tougher times with global uncertainties and price hikes

By THE STAR

JOHOR BARU: Property developers in Johor must be ready to face tougher times within the next six to 12 months in view of the uncertainties in the global economic growth.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Koh Moo Hing said they should be optimistically cautious as the outlook was not expected to be rosy.

“Hopefully, our members are well prepared to brace the hard times and avoid from being overly ambitious,” he told StarBiz.

Koh said property price in Johor, especially in Iskandar Malaysia, would also be increased by at least 5% in months to come as the hike was unavoidable.

He said with the prices of building materials, especially cement, likely to go up and shortage of workers, developers would have not much choice but to pass the cost to consumers.

Koh advised developers to carefully plan when launching a project this year and next and go for products that could still sell in an unfavourable property market.

“Although there will be a hike in prices of properties in Iskandar Malaysia, it is still not as high as those in the Klang Valley and Penang,” he said, adding that developers could expect demand for properties in Iskandar Malaysia to remain “positive” especially from time house buyers and upgraders.

He said they would not want to delay their purchase as many of them had anticipated that prices of residential properties would continue to increase.

Koh said five years ago, the selling price for a double-storey intermediate lot link house was RM300,000 but now it was starting from RM450,000.

Another factor that contributed to the hike was land prices which had been on the upward trend since the inception of Iskandar Malaysia about six years ago, he said, adding: “For instance, industrial land was sold for RM20 per sq ft five years ago and now the asking price is between RM25 and RM35.”

He said for residential projects, the prices of land varied from location to location and depending on the type of projects developers were planning.

On that note, Koh said many developers in Iskandar were now going for high-density living to fully utilise or maximise the cost of buying the land. “There is a shift in demand for high-rise apartment living in Iskandar from younger house buyers in their late 20s to early 30s,” he said.

Koh said unlike the older generation who still preferred landed properties, the younger generation were more receptive to apartment living because of the safety and security issues as well as easy maintenance for their abode.

He said the popular locations included Skudai, Nusajaya, Taman Sutera Utama and IOI Kempas Utama, Kempas with a selling price of RM400 to RM450 per sq ft for a 1,200 sq ft apartment unit.

Koh said many parents whose children were already living on the own also had downsized from landed properties to modest apartments.

“Most of them choose to stay within the same block but with some privacy,” he said.

KSL Holdings Bhd executive director Ku Hwa Seng said the company did not have much choice but to follow other developers by raising prices of their houses.

“We can expect a slowdown in property demand in Iskandar Malay-sia next year if prices of building materials continue to rise,” he said.

Ku said three to four years ago, the average selling price for a double-storey terrace house in Iskandar Malaysia was RM250,000 now it was RM400,000.

He said the land prices had also rocketed from RM6 to RM7 per sq ft five to six years ago to RM40 to RM100 per sq ft now due to the progress taking place in Iskandar Malaysia.

Ku said with the possible hike in prices of properties here, banks would be more stringent when approving loans.

He noticed more property buyers here, especially the younger generation, were going for high-rise living in the last three to five years. On that note, the company would be launching its D’Inspire Apartment @ Nusa Bestari by year-end with the gross development value of RM250mil.

Ku said the project would comprise 580 units in two 28-storey apartment block towers, and each unit would be priced from RM200,000 to RM600,000.

Country View Bhd senior marketing manager Andrew Tan said the company was still upbeat on Iskandar Malaysia’s property outlook despite tougher times ahead.

He said with the region progressing well since its inception about six years ago, it had sent a strong signal that the country’s first economic growth corridor was moving in the right direction.

“Iskandar Malaysia is not just about Johor, it is a national pride and the Government is fully committed to ensure it will take place as planned,” added Tan.

Under the Comprehensive Deve-lopment Plan (2006-2025), Iskandar Malaysia will be transformed into an international metropolis.

Tan said the company’s 756 units of five-room double-storey link houses at Nusa Sentral in Nusajaya launched in phases since 2010 had been sold out.

He said with the improvement in connectivity and accessibility within Iskandar, more buyers were looking at areas outside Johor Baru.

Tan said it would be launching the phase four of the project comprising double-storey link houses within the next three months.

“We are confident that there are buyers for our products despite an increase in price,” he said.

Nusa Sentral is located along Jalan Gelang Patah-Lima Kedia on a 121.40ha site and the project could keep the company busy for the next seven years.

– Malaysia Real Estate News

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