Localised commercial centres the trend in Skudai

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Skudai is considered the shopping district of Johor.

Skudai is a suburb in Iskander Puteri. It is located at the centre of Johor and is considered the shopping district of the state.

Iskandar Puteri, which has a population of 160,000 to 200,000, is part of the new growth corridor of southwest Johor.

The Iskandar Puteri City Council has its headquarters here while the famous mega mall, Paradigm Mall Johor, is also found here.

Shopping aside, Skudai is home to many educational institutions, including the University of Technology Malaysia (UTM), public schools for primary and secondary education, as well as esteemed international and private schools such as Fairview International School and Mount Safa International Islamic School.

A Property Advisor analysis reveals that transactions have been depressed in Skudai since 2018, but the median price appears to be going in the opposite direction, especially for high-rise residences.

From the first half of 2018 (1H2018) to 1H2019, the transaction volume of high-rise residences declined 27.8%.

From 1H2019 to 1H2020, the drop in transaction volume continued with a 77.6% decline. However, the median price continued to increase.

From 1H2018 to 1H2019, the median price rose 3.5% and spiked by an additional 15.6% in 1H2020.

Median prices and transaction volume for landed properties did not see such dramatic changes from 1H2018 to 1H2019.

Transaction volume dipped 9.5% while the median price fell 2.2%. From 1H2019 to 1H2020, the transaction volume plummeted 77.6%, but the median price rose 0.4%.

After a dip in transactions from 1H2018 to 1H2019 for both first home buyers (FHB) and investors, transactions continued to decline in 1H2020.

But the median price bucked the trend, increasing from 1H2019 to 1H2020, after a decrease in 1H2019.

For FHB, prices rose 5% while prices on the investor market increased 2%.

However, the median prices in Skudai were lower in 1H2020 compared with 1H2018, as prices had previously dropped 7% and 6.5% respectively.

What does the expert say?

In the next decade, KGVI International Property Consultants (Johor) Sdn Bhd head of research Tan Wee Tiam said Skudai expects more local commercial centres to be built in the township.

“The existing mini-town centres within each housing estate will expand and attract more activities,” he told Property Advisor.

Due to Covid-19 and the Conditional Movement Control Order (CMCO), Tan said more residents will be spending more time in their immediate neighbourhoods.

“This might create more demand for food and beverage, retail, leisure and recreational activities, co-working offices, banking and other administrative services within the town centres in Skudai.”

According to the local plan, Skudai includes UTM, Taman Sri Pulai, Taman Universiti, Taman Mutiara Rini, Taman Ungku Tun Aminah, Taman Berjaya and Lima Kedai area, which are served by the main thoroughfare Jalan Skudai.

“Skudai predominantly consists of housing schemes except for the UTM region.

“Most of the housing schemes are well established and self-sustaining, allowing residents to do their shopping and other daily activities within their respective townships,” Tan said.

However, there are no major catalysts.

“There is a need to create more employment centres within local town centres and industrial parks. The area should also provide residents with more recreational facilities and parks.”

According to Tan, two-storey terraced houses remain the most popular landed properties with prices ranging from RM500,000 to RM600,000.

“As Skudai is occupied mostly by locals, there are not as many high-rise developments there compared with other regions such as the Johor Bahru city centre and Iskandar Puteri.

“High-rise developments here target the mid-end market with prices of about RM500 per sq ft within the acceptable range,” he said.

Like other popular suburbs, Skudai enjoys excellent connectivity by road, thanks to its location on major highways to the west of Johor Bahru.

Jalan Bertingkat Skudai is a major link for residents of the area and forms part of the Federal Route.

This busy road connects to the Skudai-Pontian Highway, providing onward travel throughout the west coast of Peninsular Malaysia along the Federal Route.

Skudai also boasts excellent connectivity to Singapore, with connections to the Woodlands Checkpoint via downtown Johor Bahru and via the Second Link Expressway to the less congested Malaysia-Singapore Second Link crossing.

Impact of Covid-19 on Skudai’s property market

Given the weak sentiment, Tan said buyers are adopting a wait-and-see attitude.

“Job security and business sustainability are the two main concerns. Coupled with the fact that the borders have been locked down since March, the pipeline of foreign buyers has effectively dried up.

“As a result, developers have generally slowed down new launches and concentrated on clearing existing unsold units.”

He added that now is a buyer’s market with sellers more willing to sell at more realistic prices.

He also noted that this applies to the entire Malaysian property market, not specifically to Skudai.

This article was written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.