- Asking rental yield for apartments appears promising amid a sluggish property market – the top 5 transacted areas provided monthly returns above 5%.
- Terrace homes in Skudai, Kulai and Pasir Gudang showed impressive capital appreciation, recording above average figures of 9.4%, 13.1% and 21.5%, respectively.
- Properties within the RM260,000-RM340,000 price range were most popular among purchasers
- The price of apartments varies across Johor, in most areas they consist of mid-priced units, ranging between RM150,000-RM300,000. However, apartments in newer areas such as Iskandar Puteri have higher than average selling prices.
A view of Johor Bahru, Malaysia at night, from Woodlands area in Singapore. You can see the neon lights of the city and the causeway that links Singapore and Malaysia.
Samuel Tan, Executive Director of KGV International Property Consultants notes one common thread that runs across all these schemes – they are self-contained townships or something similar.
Zooming into Iskandar Puteri, the top 3 neighbourhoods – Bukit Indah, Nusa Bestari 2 and Nusa Bayu are commanding robust median prices in the range of RM376-RM460 per sq ft. This is attributed to their proximity to the Woodlands Causeway and the Tuas Second Link, a boon for those who commute daily to Singapore for work.
In addition, these residential enclaves are complemented by various supporting infrastructure and amenities – from banks to clinic and grocery stores. Despite their higher than average median prices, convenience is the main driver for the huge demand for properties there. Meanwhile, housing units in the other 4 suburbs offer good value for money deals.
Good connectivity links to the JB city centre is the main selling point too.
Apartments
Samuel points out that capital growth values for apartments in Iskandar Malaysia are relatively lower than their landed counterparts. This could be attributed to the current oversupply of such products in the local market. Notwithstanding that, it is a pleasant surprise indeed to witness a positive growth rate.
Key figure for top 5 areas
| Area | Total transactions | Median PSF (RM) | Y-O-Y capital growth (%) | Asking median rent (RM) | Asking rental yield (%) |
| Johor Bahru | 27 | 323 | 4.3 | 1,500 | 5.6 |
| Tampoi | 173 | 261 | 4.5 | 1,400 | 6.3 |
| Masai | 126 | 221 | 8.6 | 1,400 | 8.0 |
| Iskandar Puteri | 108 | 399 | 2.6 | 1,800 | 5.7 |
| Skudai | 107 | 230 | 3.3 | 1,400 | 7.3 |
In terms of rental yield, all 5 areas showed commendable rates ranging from 5.6% to 8.0% per annum.
Meanwhile, Iskandar Puteri and JB have many higher-priced, new apartments/service apartments and in the current buyers/tenants’ market, it is only normal for the rental yields to be lower.
Terrace Homes
Terrace homes comprise of single, double and triple storey houses.
Picture: Google Maps
Top 3 projects in each area
| Area | Total transactions | Median PSF (RM) | Y-O-Y capital growth (%) | Asking median rent (RM) | Asking rental yield (%) |
| Skudai | 885 | 322 | 9.4 | 1,500 | 5.1 |
| Kulai | 778 | 267 | 13.1 | 1,100 | 4.7 |
| Pasir Gudang | 697 | 240 | 21.5 | 1,100 | 5.5 |
| Iskandar Puteri | 659 | 388 | -0.7 | 2,300 | 5.5 |
| Tebrau | 598 | 340 | 4.8 | 1,500 | 3.9 |
Save for Iskandar Puteri which suffered a slight drop of 0.7%, the other areas performed remarkably well in terms of year on year (y-o-y) capital growth. This positive trend is contrary to the public’s perception that property prices are devaluing, says Samuel Tan.
Meanwhile, the substantial appreciation of 21.5% seen in Pasir Gudang is mainly attributed to the mushrooming of new developments in the area, particularly the Eco Tropics project by EcoWorld and Mah Sing’s Meridin East township.
These developers are offering housing concepts and products that are fresh and new to the region, at higher-than-average price points – a lake garden community with Meridin East and Eco Tropics will be the first gated and guarded development in the Kota Masai area. These ‘new kids on the block’ will inevitably influence the secondary market and pull up its prices as well.
Tebrau is a very mature area – property prices there have been increasing steadily since 2014. It’s boom period kicked in earlier compared to other areas – hence, the smaller growth rate of 4.8% in the recent year.
On the other hand, being a greenfield or new development, Iskandar Puteri is still in its ‘teething stages’ – with newly completed units coming onstream property prices are still adapting to market movements. Hence, the slight drop in property values is not alarming.
Future Trends
Within JB, the immediate purchasing trend will be for properties ranging from RM450,000 to RM800,000, shared Samuel. With the stringent loan requirements, however, home buyers must be prepared to cough up more cash for a down payment. This consumer challenge will put a constraint on developers’ selling prices. A similar trend of dampened prices can also be expected for the secondary market.
The current emphasis on assisting first-time-house-buyers will see the launching of more properties costing below RM400,000. As can be seen in the few recent government budgets, various schemes have been introduced to assist millennials and civil servants in achieving their homeownership dream.
Advice for Homebuyers & Investors
- Due diligence must-dos include product details, accessibility to convenience, cost of repairs, security concerns as well as the quality and cost of management and maintenance.
- Find out the ratio of local and foreign purchasers – having more locals within a project/neighbourhood holds more appeal as house prices there tend to be more stable.
- Considering the current oversupply of high-rise units in IM, investors should be more discerning than usual when making a purchase.
- Only purchase in popular areas – where tenant demand is high and sustainable.
- Look for projects with a good concept and a strong management team.
Article repurpose from Home purchasing trends in Iskandar Malaysia.
