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Located along the Straits of Johor at the southern end of Peninsular Malaysia, Johor Bahru (JB) spans 22,000ha.
The capital of Johor was first known as Tanjung Puteri and was a Malay fishing village.
It was renamed “Johore Bahru” in 1862 and became the capital when the Sultanate of Johor’s administration moved there from Telok Blangah.
Today JB is the second fastest growing city in the country, second only to Kuala Lumpur.
Located within the Indonesia-Malaysia-Singapore Growth Triangle, it is not only the commercial centre of the state but also the centre for financial services, commerce and retail, arts and culture, hospitality and urban tourism.
Its main industries are plastic manufacturing, electrical and electronics as well as food processing.
Analysis by Property Advisor reveals that transaction volumes for landed properties in JB were trending downwards even before the pandemic hit.
From the first half of 2018 (1H2018) to 1H2019, the number of transactions declined 28.5%, followed by another 72.1% in 1H2020.
Transactions for high-rise properties experienced a slight dip of 4.2% in 1H2019 but plummeted dramatically by 81.5%, in 1H2020.
In terms of price, the trend for landed properties was similar to transaction volumes, decreasing steadily since 2018.
In 1H2019, the median price had decreased 2.3% from 1H2018, while in 1H2020, the figure dropped a further 1.6%.
As for high-rise properties, the median price rose 6% year on year in 1H2019 but declined 20% in 1H2020.
Meanwhile, the buyer profile showed that buyers paid more in 1H2020 compared with 1H2019.
First-home buyers (FHB) paid 6.1% more than in 1H2019, while the median price in the investors’ market increased 2.2%.
Prior to that, the median price for FHB had dropped 1.3% in 1H2019 while the median price for investors remained unchanged from 1H2018 to 1H2019.
In terms of transactions, the volume of FHB transactions has fallen steadily since 2018.
From 1H2018 to 1H2019, the number of transactions fell 12.7%, followed by a sharp 78.7% drop in 1H2020.
Investor transactions told a different story. The volume remained almost unchanged in 1H2019, with only a 0.6% increase.
From 1H2019 to 1H2020, the 71.5% drop in transactions was not as dramatic as the drop in the FHB market.
What do the experts say?
Royal Institution of Surveyors Malaysia Johor Branch immediate past chairman Dr Kamalahasan Achu told Property Advisor that there have been several prestigious residential and commercial developments in JB over the past 10 years.
“These developments have closed the quality gap between JB and the Klang Valley. I do not think JB has lagged behind in terms of standard or quality of living compared with other major cities in Malaysia.
“You just have to look at the JB skyline. Much of this is attributed to the Singapore, China and Iskandar Malaysia factors.”
In terms of facilities, Kamalahasan said connectivity in the form of affordable and green public transport is one area where JB could improve in the short to medium term.
“Public Transport Corporation of Johor Sdn Bhd – a private company wholly owned by Johor State Secretary Inc, is making promising albeit slow progress in planning and coordinating public transport in the state.”
He added that JB as a city is a work in progress when it comes to urban planning and management, which requires meticulous and transparent land-use planning.
“Planning policies with regards to urban renewal, protection of green space and energy conservation should guide actions at the local, district and state levels. Actions speak louder than thick, colourful policy manuals.”
Cheston International (Johor) Sdn Bhd’s David Ng said JB is an established township with stable market prices and is a preferred residential area due to familiarity and the convenience of its accessibility.
“Major developers in the region have been developing mostly high-rises in phases with adequate planning for the future. The township of JB City Centre is a mature development.
“Due to the Covid-19 pandemic, the market for residential and commercial property is slow, but land scarcity and the proximity to Singapore with the Johor Bahru–Singapore Rapid Transit System in the planning, will likely lead to a boom in the coming years.”
He said JB’s market value has been appreciating steadily and it would be one of the most in-demand townships in the state.
Room for improvement
Ng said most of the condominiums and apartments are gated and guarded with three-tier security but the older landed residential areas that are more than 40 to 50 years old are still not gated and guarded.
“Safety is the main concern for any township, and many households prefer living in a gated and guarded community for peace of mind and would therefore choose to move to a newer development or high-rise property.”
He said single-storey terraced houses, ranging in price from RM450,000 to RM550,000, are popular due to their affordability and location, followed by double-storey terraced houses priced at RM600,000 to RM800,000 and semi-detached houses ranging from RM800,000 to RM1,100,000 in price.
Although high-rise properties were popular a few years ago when they were first launched, transactions have not been as active in recent years due to oversupply and market uncertainty.
This article was written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.