My friend, who is a Malaysian PR, brought me to see a few condos in Iskandar. Most of them are being sold at M$500 (S$200) psf, are freehold in tenure and come with full facilities. The roads are not congested, so driving is a pleasure. The residents said that Iskandar is relative safe, in spite of the reports in Singapore media.
We visited Danga Bay, Horizon Hills, Nusajaya, Medini, :Ledang Heights, Puteri Harbor and Gelang Patah.
Most of the 2+1 apartments have an area of 1,000 sf and sells for M$500,000 or S$200,000. This is a 2 bedroom apartment with a small room (+1) that is used as a study.
I am impressed with the 3+1 apartment in Danga Bay, which is on the outskirt of Johor Bahru and is 10 mins drive from the causeway. The size is 1,600 sf and it sells for S$400,000. It has 2 keys. One key leads to a 500 sf studio apartment. The other key leads to a 2+1 apartment of 1,100 sf. Both units are inter-connected. The owner can live in 1 unit and rent out the other unit or the grandparents can stay in the adjoining studio unit.
I met a Singaporean at the showroom of the Danga Bay condo. He works as a property agent in Singapore but has bought a unit at Danga Bay. He said that the LRT will connect Danga Bay to the MRT station in Johor Bahru.
If you find a 99 year condos selling for $1,200 sf in the outskirts of Singapore to be too expensive, a property at Iskandar may be an attractive option, especially if your work requires you to travel often outside of Singapore.
We visited Danga Bay, Horizon Hills, Nusajaya, Medini, :Ledang Heights, Puteri Harbor and Gelang Patah.
Most of the 2+1 apartments have an area of 1,000 sf and sells for M$500,000 or S$200,000. This is a 2 bedroom apartment with a small room (+1) that is used as a study.
I am impressed with the 3+1 apartment in Danga Bay, which is on the outskirt of Johor Bahru and is 10 mins drive from the causeway. The size is 1,600 sf and it sells for S$400,000. It has 2 keys. One key leads to a 500 sf studio apartment. The other key leads to a 2+1 apartment of 1,100 sf. Both units are inter-connected. The owner can live in 1 unit and rent out the other unit or the grandparents can stay in the adjoining studio unit.
I met a Singaporean at the showroom of the Danga Bay condo. He works as a property agent in Singapore but has bought a unit at Danga Bay. He said that the LRT will connect Danga Bay to the MRT station in Johor Bahru.
If you find a 99 year condos selling for $1,200 sf in the outskirts of Singapore to be too expensive, a property at Iskandar may be an attractive option, especially if your work requires you to travel often outside of Singapore.
Property is the largest cost item in anyone's expenses.
ReplyDeleteThat being the case, caution and prudence is appropriate. The Malaysian rules and laws change according to the flavour of the month. State of Johore and the Federal Government may not be synchronised.
My experience with a property in KL many years ago was not pleasant and I incurred heavy losses and also headaches.
Be prepared for:
Legal documents in bahasa melayu.
Utilities bills from various providers. Property tax, state tax and federal tax for foreigners are different, legal fees are also different.
Only the wealthy and the courages can afford the risks.
If this is going to be your first home, think very deeply and be prepared.. it may be a great investment, or decision.. but think it through.
My comments below are based on my experiences in buying residental properties in Malaysia only.
ReplyDelete1)The Sales and Purchase Agreement (SPA) for residential properties are based on a standard SPA contract defined/governed by the Malaysian Housing Ministry. This template is in English and MUST be used for all residential properties sold by licensed housing developers.
2) Yes, utilities bills etc may be in Bahasa Malaysia, but thats expected. Its the national language. Can always get someone to translate or pick up the language.
3) Legal fees are defined by the Bar Council of Malaysia and published online. Buying from developers allow you to enjoy freebies like free legal fees for SPA and Loan Agreement. However I do agree that on the whole legal fees are much more expensive than SG.
4)There are different types of tax and its for different purpose:
- Quit Rent is the tax on the property just like what you pay to IRAS for your property tax in SG.
- Council assessment fees is what you pay to the local council for the area services like cleaning, refuse collection etc.
- Foreigners are only allowed to buy min RM500k properties and above and are required to pay a state levy to purchase to purchase >500k property. For Johor properties >500k, no need to pay federal fax, only need to pay Johor state govt abt rm13k for foreigner levy. Other states may have different levy prices.
I agree one must go in with eyes wide open but its not as bad as veronika has claimed it to be.
Sympathy for Veron, if not wrong, she invested in BT. OUG condo by developer MBF, who got whacked by the Asian Financial Crisis.
ReplyDelete3 considerations to take note when buying Malaysian real estate -
First, track record and reputation of developer is prime, stick to developers like Setia, Mulpha and Khandazah related like UEM and Sime Darby where no worry about bankcruptcy.
Secondly, Malaysia is very much bigger than Singapore, so not wise to buy condos, follow what the Malaysians are buying, and you would never go wrong.
Thirdly, property should be part of a new Township development, where facilities like Banks and large anchor shopping centres are planned.
Fourthly, put on your thinking cap, and the observant shrewd investors would go for properties that are practically immuned to boom and bust.
Yes, the various taxes added up could be quite steep, and paying them could be a hassle at different payment locations, but there are private Companies who offer a service to pay for you at a fee. Saves you time and money running about.
Many free-hold condo units in good location near/(less than 30 minutes' drive from) KL Sentral of which have appreciated in value of 100% or more in the last 2 to 3 years. Timing of entry and exit makes a huge difference in profit and loss. However, property investment is a long term business. Besides the factor of holding power, the purpose(for owner-occupied or rental income) of which helps one to make a sound decision before putting your hard-earned money in any of the overseas investments.
ReplyDeleteA rule of thumb is to study the market first. Do not rush! Some experts' experience shown that in consideration of long term prospects and returns, location of KL is a better bet NOT Johor Bahru. The state government of Johore could be troublesome for which, if based on the past experiences of many investors.
I prefer Iskandar because it is next to Singapore. That is a big advantage.
ReplyDeleteThe experts also said that the property market in Malaysia is weak, except for Iskandar.
Thanks guys, but I will give this one a miss.
ReplyDeleteMarkets are always open for business.
What markets fear most is no buyers.
There are other opportunities too.
Iskandar is a good location for consideration for property investment. But normally, the capital of a nation is much more sustainable in value appreciation in a long run.
ReplyDeleteI bought 2 condo units in Sri Relau, Penang before the financial crisis in which Maddog declared RM having zero value outside Malaysia.
ReplyDeleteI lost 30% of my investment which I had to do to cut losses as there were holding costs like bank interests n convervancy charges.
NO more investment in Malaysia for mw!
I think the upside-downside analysis favours Malaysia, where there remains a pretty significant pricing arbitrage vs Singapore. Also, you have the developing nation effect (if u believe in Malaysia 2020 plan), and the "Shenzhen Effect" (relevant in the context of the improved relationship between Singapore and Malaysia and the improved connectivity between the two countries). Having saidall that, I do think the new condos, at RM1,200psf, are pretty toppish. I think the best way to effect a bet on iskandar is to buy a resale property in a prime location. Due to the inefficient secondary markets, there are still pretty good bargains in the resale market. Eg I was looking at a condo in zone A called Orchid View, which is right next to the proposed MRT, going at RM600psf, less that half that of nearby Tri Towers going at RM1400 psf.
ReplyDeleteHi Kin,
ReplyDeleteI loved reading this piece! Well written! :)
jason
investment properties
Hi
ReplyDeleteWe r.thinking of buying a unit.at.the new country gardens @ danga bay. First of years, hope to rent out but eventually intent to move n live there after retirement aft abt 8 yrs
Is this a good plan to buy a unit, most likely 2 bedroom at RM650k?
With the new CIMB malaysia home loan, we can deposit equal amt of home loan quantum, asuming RM500k into a current acctnat the bank, and not incur a single cents interest.
Thanks in advance for any views and advice.
Warmest regards
Peter
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