KUALA LUMPUR: The Johor property market has seen notable improvement since the previous year, buoyed by robust demand from Singapore, and this purchasing trend is anticipated to continue.
According to the Property Market Outlook Report 2024 by DataSense, Iskandar Puteri stands out with the highest proportion of foreign demand, predominantly from Singaporean nationals and permanent residents (PR).
The report highlighted that property prices in Singapore have reached a historic peak, which is also fueling demand for properties in Johor.
PropertyGuru Malaysia reported a substantial uptick in property demand in Johor, especially in Johor Bahru.
Its country manager Sheldon Fernandez said that the completion of the Rapid Transit System (RTS) Link in 2026 is poised to revolutionise Johor's economy, enhancing connectivity with Singapore and injecting vitality into the local property market, notably in Johor Bahru.
Fernandez highlighted that with the RTS Link reaching 50 per cent completion in April 2023, the demand for properties in Johor Bahru surged by 17 per cent, as reported by property marketplace iProperty Malaysia.
He said that Johor is undergoing a significant metamorphosis, transitioning from grappling with the highest property overhang to a position of strength.
The National Property Information Centre's (Napic) Property Market Report 2023 indicated a 20 per cent reduction in unsold property units in Johor, declining from 5,258 in 2022 to 4,228 units by 2023.
Fernandez attributed this positive transformation to various initiatives led by the Johor state government, including the development of the RTS Link, the establishment of Forest City as a Special Financial Zone (SFZ), and the proposed Johor-Singapore Special Economic Zone (SEZ).
The potential revival of the Kuala Lumpur-Singapore high-speed rail (HSR) is also a major contributing factor, he said.
Fernandez stressed that these efforts not only stimulate heightened demand for properties but also uplift property values.
He drew attention to a significant year-on-year (y-o-y) median asking price growth of 20 per cent for service residences in Johor Bahru.
Notably, smaller units witnessed robust price increases, with 501–750 square feet (sq ft) units experiencing a 27 percent growth, 751–1,000 sq ft units seeing an 18 percent increase, and 1,001–1,250 sq ft units registering a 15 percent growth.
Fernandez suggested that the preference for seamless connectivity might outweigh the inclination towards larger living spaces due to lower entry costs and proximity to transportation hubs.
He referenced the Global Property Guide, indicating that the average gross rental yield in Malaysia reached 5.16 per cent as of the first quarter of 2024, with Johor surpassing the national average at 6.25 per cent.
Fernandez urged prospective homeowners and investors to carefully assess Johor Bahru and its surrounding suburbs, taking into account large-scale projects like the RTS as well as other programmes promoting Johor as a burgeoning economic centre.
He concluded by highlighting the state's bright future, propelled by current initiatives and anticipated economic expansion, which may present appealing real estate investment opportunities.