/// West Malaysia Property News
Questioning the Sustainability of China Developers in Iskandar
coming to this part of the world
because of weak demand in their
own country and to position
themselves as being able to
offer their customers properties
overseas.
Property Transactions Dip, but House Prices
Continue to Rise
(-34.4%), Labuan (-33.9%),
Penang (-23.9%) and
Selangor (-14.3%).
By market share, Selangor
outpaced the other states,
contributing to 26.1% of
all residential transactions.
Johor was next at 13.7%,
followed by Perak, Penang
and Kedah.
But Malaysia has imposed
restrictions on foreigners buying
properties that are only above RM1
million, meaning US$300,000 and
above for buyers from China.
Country Garden show gallery in Danga Bay
Even before the physical presence
of the property developers from
China can be seen in Johor Baru, the
psychological impact the builders
have on the industry as a whole in
Malaysia is already being felt.
The fear of developers from China
flooding the market with their largescale development is real among
property developers, not only in
Johor Baru but also the country at
large.
This is because all the big boys of
the property sector have a presence
in Johor Baru, or Bandar Iskandar.
Without a project in the southern
tip of the peninsula, a property
developer is not considered to have
“arrived”.
That is the clout that Johor Baru
commands, thanks to the initiative
of the federal government to make
Iskandar Malaysia the thrust of
its development of the southern
economic corridor.
The might of the China developers
was well displayed when Country
Garden Holdings Ltd launched 9,000
apartment units in August, of which
6,000 were taken up within two
months.
The Malaysian market is not used
to developments of such a scale, for
sure.
What now that the property market
is already softening in Iskandar
Malaysia?
The latest launch in Puteri Harbour
by a Singapore-based developer
saw a booking rate of only 25%,
according to a report by a business
weekly.
Puteri Harbour is about the most
strategic of locations in Bandar
Nusajaya, which is the hub of
38
www.PropertyHunter.com.my
Iskandar Malaysia. It faces the Straits
of Johor and is near the second link
connecting Malaysia and Singapore.
Some 18 months ago, sales were
brisk in Puteri Harbour, with prices
transacting at around RM700 per
square foot (psf).
The latest project launched by
Pacific Star Development Pte Ltd
is being marketed at between
RM1,300 and RM1,600 psf. Property
agents feel that the pricing is the
reason for the poor take-up rate.
The view of most developers is that
as long as the developing company
has the ability to hold on to the
property, it will be sold eventually.
The critical factor is that the
developer has to have deep pockets
to weather periods of slowdown.
In this respect, there is a view that
developers from China indeed have
deep pockets and would be able
to hold on to their projects and
continue to develop them even if
demand is poor.
Lastly, the devel