Property prices in Malaysia’s southern Johor economic region, also known as Iskandar, are expected to stabilise following property cooling measures announced in October’s budget.
With growth averaging 8 per cent a year, Iskandar has attracted over US$40 billion of investment since 2006. Property and manufacturing, accounts for 44 per cent of the total investment.
Buoyed by foreign buying, especially by Singaporeans, property prices in some areas have quadrupled.
Now that the government has stepped in with cooling measures, the state authorities expect prices to level off.
Mohd Khaled Nordin, the chief minister of Johor, said: “(The federal government) has already taken two big measures — one is to increase the minimum to one million ringgit for purchase of property. The other is the real property gains tax.
“Whatever the state introduces will not have a big impact compared as to what the federal (government) has already introduced.”
Ismail Ibrahim, the chief executive of the Iskandar Regional Development Authority (IRDA), said: “We expect the property sector more or less to stabilise. So once it stabilises, it is also a clear indication — not only of a cooling off, but also we are beginning to tackle the unnecessary speculation that might take place all this while.”
Beginning in 2014, foreigners can only buy property costing more than US$314,000, and disposal of the property within first three years will be slapped with a 30 per cent tax.
Still, the authorities said interest from across the causeway should remain high if the Singapore dollar stays strong .
Mr Ibrahim added: “We do not expect the price gap to close in the near-future or in the mid-term. Our position and offering is different compared to other regions, including our neighbour. For one, we never lack of space.”
Finding the right mix of talent remains the main challenge for Iskandar. Still, the development authority is confident of meeting its target of attracting over US$120 billion worth of investments and transform Iskandar into a metropolis by 2025.
Source : Channel NewsAsia – 6 Nov 2013