Even as news of the possibility of a property supply glut in the Iskandar regions break, Malaysian banks are beginning to tighten their rules about lending on property in these areas.
Since the Monetary Authority of Singapore (MAS) has implemented their Total Debt Servicing Ratio (TDSR) Framework, it has been harder for Singaporeans to secure loans. Some have turned to foreign banks, on the back of the strong SingDollar, as repayment is lower should the exchange rate be in the lender’s favour. It used to be possible to secure loans of up to 90 per cent of the purchase price of a property. But that may soon also prove more difficult as Malaysian banks are increasingly becoming more selective in lending to foreigners.
Not only are the consumers feeling the heat of a possibly oversupply, competition is high in the developer, building and construction industries as well. Construction costs have increased, and the number of foreign developers and building firms competing for projects are also on the rise.
Despite a slight dip in interest from buyers since the announcement of a delay for the Singapore-Kuala Lumpur high-speed rail to 2020, some buyers remain positive about the potential of their Iskandar property, banking on a possible rise in the number of retirees and Singaporean families who may want to own a retirement or holiday home in Malaysia.
