WHEN we first heard about Iskandar Malaysia back in 2006, there was a fair bit of skepticism. Many of us wondered, "Where is this Iskandar Malaysia?"
Today, the skepticism and doubts about Iskandar Malaysia have turned into confidence, to judge by the visible changes in the southern development corridor, the result of a feasibility study conducted by Khazanah Nasional, the government's investment arm, in 2005.
Formerly called the Iskandar Development Region and South Johor Economic Region, Iskandar Malaysia covers 2,217 sq km. It is three times bigger than Singapore and twice the size of Hong Kong.
According to KGV International Property Consultants executive director Samuel Tan, prices of residential properties have risen by an average 40 percent since 2006, in a city that used to suffer from a real estate overhang.
Tan said the prices, which had been sluggish after the 1997 Asian financial crisis, started to see a rising trend due to a combination of factors.
Johor, he said is starting to play catch-up with places like Kuala Lumpur and Penang, with the gaps in its prices of properties narrowing.
While this is certainly sweet music to the ears of developers and those to the property development sector, local folk will find it daunting to own property in Iskandar Malaysia.
The upward trend started in 2009, with the "quantum leap" occurring in 2011, when prices of upscale service apartments broke the ceiling of RM500 per sq ft and climbed into RM700 per sq ft.
Many Singaporeans saw property in Iskandar Malaysia as a good investment for a holiday home and for capital appreciation, and not so much for rental yield.
On Jan 11, the Singapore government announced the revised rates under the additional buyer's stamp duty (ABSD), applicable to purchases or residential property acquisitions. The ABSD had previously applied to Singaporeans buying their third residential property and permanent residents getting their second.
The latest measure will affect its citizens, permanent residents (PR) and foreigners who buy property in the island republic.
A check with the Inland Revenue Authority of Singapore revealed that foreigners who buy residential property in Singapore will now be subject to pay the ABSD of 15 per cent of the purchase price, up from the previous 10 per cent. Singaporeans buying their second homes will be hit with an ABSD of seven per cent, while those with permanent residency status will pay an additional stamp duty of five per cent on their first home purchase.
This development has also boosted interest in properties in Iskandar Malaysia.
Residential enclaves in Bukit Indah, Setia Eco Gardens and Setia Tropika, all developed by the SP Setia Bhd Group, for instance, have foreign owners who buy the properties to live in, and not on speculation, according the group divisional general manager M.L. Hoe.
Some are asking if the booming property market in Iskandar Malaysia is the result of hype.
I do not think as the changes and developments there can be seen by the eye. It's not all frivolous talk followed by nothing!
Look at the Western Coastal Highway that leads to Nusajaya, the Southern Link to Masai and the Eastern Dispersal Link from the Pandan Interchange to the Customs, Immigration and Quarantine complex in the heart of Johor Baru.
Given its well-planned infrastructures, amenities, catchment and accessibility, Iskandar Malaysia is a mine of low-risk investment opportunities. Of course, Investing in projects by a reputable developer is a vital factor.
Places of interest such as Legoland and the Puteri Harbour theme park, and the education hub Educity, are added draws for foreign investors.
Iskandar Malaysia is a 20-year-plan, and changes are slowly but surely taking place. It is up to the local authorities to monitor the property sector to ensure that there will not be an over-supply in the future.
- News strait Time