10 years on, Iskandar is struggling

Iskandar’s housing market continues to struggle, as evidenced by the drop in new launches and sales transactions last year, reported The Straits Times recently.

In fact, the number of high-rise residential projects launched last year fell to about a dozen, from 24 in 2014 and 49 in 2013, revealed property consultancy Savills.

Data from the National Property Information Centre (Napic) showed that sales of apartments and condo units for the first three quarters of 2015 dropped 23 percent year-on-year to 1,368 units.

Christopher Boyd, Executive Chairman at Savills Malaysia, noted that the drop in launches can be attributed to developers exercising self-regulation and restraint. In addition, some may be struggling to secure financing.

The slowdown first hit the market in mid-2014 following reports of rising property prices and oversupply concerns. The introduction of the goods and services tax, cooling measures, and the country’s turbulent political scene inevitably affected market confidence.

Fears of a glut were also stoked by the aggressive marketing of mega projects by Chinese developers.

The instability of the ringgit and the general economic slowdown saw most investors adopting a wait-and-see approach, said Landserve (Johor) Executive Director Wee Soon Chit.

Iskandar, which has entered its 10-year mark since its development plan was unveiled, still lacks proper industrialisation, whereby more business activity could help spur demand for property. In fact, people are only buying houses there to use as second homes.

Nonetheless, developers and property consultants remain confident about the region’s prospects.

“We are encouraged by the massive infrastructure improvements in Iskandar, as well as the investment that has gone into job-creating industries. This, and the logic of the location, guarantees substantial future demand for housing,” said Boyd.

“Sure, some developers jumped the gun, but it is only a matter of time before the market takes off again, and, at some time in the future, house prices in Iskandar could easily become the highest in the country.”