Recently I encountered a new dilemma about whether I live in Singapore or in Johor Bahru? I used to answer Singapore without hesitation as the city state has been my home for a good 8 years now. But today considering the amount of time I spend at my 2nd home in Johor Bahru, given the same question I now tend to blurt a vague answer about how I work and live in BOTH cities.
Judging how heavy the cross border traffic is between Singapore and Iskandar Malaysia, I am sure that I am not alone. Despite the typical misgivings on Iskandar Malaysia, there is still a large, silent (or perhaps not so silent nowadays) population who are enjoying the benefits of cross border living. And with recent events, perhaps it is time to relook at real estate at Iskandar Malaysia. And I can give you 5 reasons why:
No 1 – Property Prices are as attractive as ever
The property market in Iskandar Malaysia has been in a downturn since late 2014. The oversupply has been limited to high end residential homes and prices have largely mirrored Singapore’s private property price index, falling anywhere between 5 to 15% from the peak in 2013. Fire sales and auctions however have fairly few so far and most owners have been willing to hold, especially once they have found tenants. A number of property developers have also slashed prices to entice buyers, so better deals can be found comparatively to a few years ago.
Opportunities exist for buyers who are willing to scour the market and buy in the current downturn while prices and sentiment remain depressed. High quality completed freehold properties can be found from RM750psf ($250psf), still a veritable bargain considering how fast land prices are moving up in Singapore due to en bloc sales and government land site sales.
No 2 – Rent out your Singapore home and live in Iskandar? Or vice versa?
One scenario that a number of Singaporeans take advantage of is to rent out their homes in Singapore and live in Iskandar. Many Singaporeans have fully paid up HDB flats which can be rented out from $2,000 per month or higher. A 2 bedroom condominium in Iskandar can be bought from as low as RM750,000 ($250,000) or rented at RM2,000 a month. This gives you gross savings of at least RM4,000 which is more than sufficient for living expenses in Iskandar.
A second scenario applies for Singaporeans to buy properties in Iskandar with 100% cash. Rental yields for high end residential in Iskandar is anywhere between 3-4% p.a, which is a decent return for an up and coming city bordering Singapore. Most Singaporean buyers who take up this scenario treat the Iskandar property as a future retirement home or weekend home in old age. Perhaps a tempting option for all the en bloc millionaires in Singapore?
No 3 – Retirement Living in Iskandar with affordable Healthcare & Education
With the Singapore dollar now hovering around $1:RM3, retirement living in Iskandar becomes an increasingly attractive option especially if you consider using your CPF funds to live out your retirement comfortably in style (CPF savings x 3!) A cup of coffee in a hawker center runs at RM1.60 ($0.53 cents) and a bowl of noodles typically at RM6 ($2). What you typically pay for in Singapore food courts can buy you a meal in mid range restaurant in Malaysia.
Singapore is an expensive country, more so in its healthcare costs. Healthcare costs in Malaysia is remarkably cheaper and you have the option to choose from high quality services from Parkway Health’s Gleneagles and Singaporean operated Regency Hospital. You can also choose to use Medisave to pay for medical costs in selected private hospitals in Iskandar Malaysia.
Buying a car is also an interesting option for those who choose to live in Iskandar. A new Toyota 4 door sedan cost about RM85,000 ($28,400), does not require a Certificate of Entitlement (COE) and can be used indefinitely. Singaporeans can apply for vehicle financing from banks and check out second hand vehicles for even better bargains. Buying a car provides you freedom to travel not only within Iskandar Malaysia, but also to explore Melaka, Kuala Lumpur and I know of at least one Singaporean who makes road trips to Thailand.
Interestingly enough, today we see other nationalities other than Singaporeans who are making the choice to live & work in Iskandar Malaysia. Nationalities such as Koreans, Japanese and Chinese are regular sights in Iskandar, many operating small businesses or have their children studying in the various international schools.
No 4 – More Shopping & Entertainment Options to Enjoy
The shopping and entertainment scene in Iskandar Malaysia has expanded and is fast growing. IKEA opened its first store in Johor Bahru in October 2017 with the Singapore media and online shopping portals creating a buzz making price comparisons with IKEA Singapore. Paradigm Mall Johor Bahru opened last year boasting over 1mil sqft gross floor area (as large as Singapore’s Vivocity). Soon to come in 2018 is Capital 21 with its indoor theme parks of Cartoon World, Movie World and Music World.
For the young at heart, Legoland will be opening its own Sea Life Aquarium in end 2018. Extreme sports fans will be delighted by X-Park’s opening in Medini (late 2018) offering paintball, wall climbing, glamping, archery and a host of outdoor activities. A Virtual Reality (VR) indoor theme park will also be opening in Medini by early 2019.
Tourists and visitors have also been making waves at the heritage areas of Johor Bahru city center, where massive rejuvenation is taking place. Heritage shop houses are being converted into hip trendy cafes and boutiques showcasing young designers including those from Singapore.
Other related hotspots include the re-launching of Desaru’s white pristine beaches (about an hour’s drive away from Johor Bahru) with water sports, golf courses and high end hotels including Aman and Hard Rock Hotel.
No 5 – High Speed Rail (HSR) and Rapid Transit System (RTS) have firm delivery datelines
The Singapore and Malaysian governments in recent years have signed legally binding bilateral agreements to construct the High Speed Rail (high speed trains linking Jurong East, Iskandar Malaysia to Kuala Lumpur) and Rapid Transit System (an MRT link into Johor Bahru from Woodlands MRT) by year 2026 and 2024 respectively. That is only 6 years away for the RTS and frankly speaking, not too far away into the future.
If anything, the HSR and RTS will only cement the future prospects and live-ability of Iskandar Malaysia. Today between 150,000 to 300,000 people travel across the borders daily and with the HSR and RTS, it would be much more, creating more economic activity in Iskandar Malaysia.
What Should I Look Out for if I am Buying?
There is a plethora of choices for the interested buyer. I always recommend to check out the secondary/ resale markets as you can immediately view the actual property, judge the build quality as well as its existing occupants in the area or building. Do remember that buying real estate is a long term commitment and given the many upside catalysts for Iskandar Malaysia, as long as you choose a decent property and have patience, you will be better off in the long run.
