Property News

Errr......... HSR terminating at Johor Bahru Sentral?


SINGAPORE: Singapore's Ministry of Transport (MOT) on Friday (Jun 19) said it was "surprised" that Malaysia's Land Public Transport Commission (SPAD) gave a recent statement to Malaysian media, saying it preferred to terminate the upcoming high-speed rail (HSR) terminus at the two nations' existing CIQ (customs, immigration and quarantine) complex in Johor Bahru.

In May, leaders of Singapore and Malaysia announced that the HSR terminus in Singapore will be located at Jurong East.

"Our understanding is that Malaysia views the commercial premise of the Kuala Lumpur-Singapore HSR project, and with which we agree, as being based on a direct connection between the two city centres. Terminating the HSR in Johor Bahru will not achieve this objective," said the Ministry of Transport's spokesperson.
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MOT's statement is as follows:

Singapore and Malaysia agreed at the 2013 Leaders’ Retreat to build the High Speed Rail (HSR) link between Kuala Lumpur and Singapore. Studies have been carried out by both countries. Malaysia decided last year that the HSR terminus in Kuala Lumpur would be located in Bandar Malaysia. Similarly, Singapore has decided that the HSR terminus in Singapore would be located in Jurong East. Prime Minister Lee Hsien Loong informed Prime Minister Najib Razak of this at this year’s Singapore-Malaysia Leaders’ Retreat, and the location was also announced to the public at the joint press conference by the two Prime Ministers following the Retreat. We are therefore surprised by the Land Public Transport Commission’s (SPAD) recent statement that Malaysia preferred to terminate the HSR at the existing CIQ (customs, immigration and quarantine) complex in Johor Bahru.

Furthermore, our understanding is that Malaysia views the commercial premise of the Kuala Lumpur-Singapore HSR project, and with which we agree, as being based on a direct connection between the two city centres. Terminating the HSR in Johor Bahru will not achieve this objective.

Both sides are in discussion on the project’s commercial and operating models. Singapore has proposed that the domestic transit HSR services, which will stop at six stations in Malaysia between Kuala Lumpur and Singapore and hence primarily serve commuters travelling within Malaysia, be operated separately from the express non-stop HSR services between Kuala Lumpur and Singapore. This will give Malaysia autonomy over the domestic transit services to serve Malaysia’s domestic needs and benefit Malaysia, while both countries work together on the cross-border HSR services.

On the Johor Bahru-Singapore Rapid Transit System (RTS) Link, both countries can only determine the type and alignment of the crossing after both terminus locations have been confirmed. Singapore informed Malaysia in June 2011 that the terminus in Singapore would be located at the Woodlands North station of the Thomson-East Coast Line. However, we have yet to receive official confirmation of the location of Malaysia’s RTS terminus in Johor Bahru. As such, contrary to what was said in the Malaysian media by Johor State Exco for Public Works, Rural and Regional Development Committee Chairman Datuk Ir. Haji Hasni bin Haji Mohammad, there is no agreement with Malaysia that the crossing will be a high bridge.

Don't really have good feeling about the way the MY side is playing the game. With it, and the weakening RM, I see Iskandar declining also. HSR and RTS are game changers. Now it looks to me that RTS is as good as scrapped, while HSR is just a dream.

I wish Singapore could buy 50% of the land in Iskandar and it becomes part of Singapore. By now, we will be making our own progress while the MY politicians continue wasting their time playing ding-dong games. The hell with HSR and RTS. We will have our own efficient MRT lines go all the way into Iskandar.

A colleague asked me: "Why are you Singaporeans so bullish about Iskandar? It'll flop. Or rather, even if you're optimistic, it'll take donkey years to even move slightly. You should know how the way MY politicians work. HSR? Haha... maybe it won't even be ready in 2030!"

My colleague is a Malaysian.

sgcount said:

Don't really have good feeling about the way the MY side is playing the game. With it, and the weakening RM, I see Iskandar declining also. HSR and RTS are game changers. Now it looks to me that RTS is as good as scrapped, while HSR is just a dream.

I wish Singapore could buy 50% of the land in Iskandar and it becomes part of Singapore. By now, we will be making our own progress while the MY politicians continue wasting their time playing ding-dong games. The hell with HSR and RTS. We will have our own efficient MRT lines go all the way into Iskandar.

A colleague asked me: "Why are you Singaporeans so bullish about Iskandar? It'll flop. Or rather, even if you're optimistic, it'll take donkey years to even move slightly. You should know how the way MY politicians work. HSR? Haha... maybe it won't even be ready in 2030!"

My colleague is a Malaysian.

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Both sides are still negotiating on the deal now. I think these are all nego chips by MY.
I believe SG must be proposing that Singapore pays for cost of infra from middle of causeway onwards.
So Malaysia is implying that cost of infrastructure after the JB sentral station should be paid by SG....even if its within malaysia.
Just my wild guess lah....

sgcount said:

Don't really have good feeling about the way the MY side is playing the game. With it, and the weakening RM, I see Iskandar declining also. HSR and RTS are game changers. Now it looks to me that RTS is as good as scrapped, while HSR is just a dream.

I wish Singapore could buy 50% of the land in Iskandar and it becomes part of Singapore. By now, we will be making our own progress while the MY politicians continue wasting their time playing ding-dong games. The hell with HSR and RTS. We will have our own efficient MRT lines go all the way into Iskandar.

A colleague asked me: "Why are you Singaporeans so bullish about Iskandar? It'll flop. Or rather, even if you're optimistic, it'll take donkey years to even move slightly. You should know how the way MY politicians work. HSR? Haha... maybe it won't even be ready in 2030!"

My colleague is a Malaysian.

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Just buy the well established areas as they are self-sustaining even before the "Iskandar" concept was mooted. New areas are untested and could take more than 10 years to see signs of vibrancy. You can read a good 2012 article below that is even more relevant today:

Factors you should be aware of before you invest in Iskandar, Johor
https://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

FHBH12 said:

Just buy the well established areas as they are self-sustaining even before the "Iskandar" concept was mooted. New areas are untested and could take more than 10 years to see signs of vibrancy. You can read a good 2012 article below that is even more relevant today:

Factors you should be aware of before you invest in Iskandar, Johor
https://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

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As long as you are buying for own stay, under no pressure to undertake repayments and not speculative, you are alright.
If you are buying to flip, then I would say get ready to flop. I think due to projected weak resale prices, people would hold on to their properties.
Rentals would be soft. For those who take loans, be aware bank interest rates will rise.
Only consolation is RM is weak against SGD.

One very important factor which many of us ignore is the importance of freehold title against leasehold titles. To Singaporeans, leasehold is very normal and one just dismiss it as if it is 125 years, it does not matter. But in Malaysia, if you sell a leasehold property, you need the approval of the State Government first before the sale can be completed. That's where the uncertainties of ever changing regulations comes in. In freehold titles, you are not subjected to them.

FHBH12 said:

Just buy the well established areas as they are self-sustaining even before the "Iskandar" concept was mooted. New areas are untested and could take more than 10 years to see signs of vibrancy. You can read a good 2012 article below that is even more relevant today:

Factors you should be aware of before you invest in Iskandar, Johor
https://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

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Yah that's quite true. But too late now... Bought into Medini purely for investment. Will work out the math this weekend to see if it's worth it to dump the property at a loss now.

The liability from paying monthly bank loans for more than 10 years (a possibility and really a long time from an investment perspective) without any rental income and steadily declining RM currency are quite hard to swallow for me. No exit strategy also as I don't foresee any buyers.

Probably won't matter for those who are very certain they want to retire there for good and the price paid for the property is only a small fraction of their total net worth. So can resell or not next time won't affect much.

sgcount said:

Yah that's quite true. But too late now... Bought into Medini purely for investment. Will work out the math this weekend to see if it's worth it to dump the property at a loss now.

The liability from paying monthly bank loans for more than 10 years (a possibility and really a long time from an investment perspective) without any rental income and steadily declining RM currency are quite hard to swallow for me. No exit strategy also as I don't foresee any buyers.

Probably won't matter for those who are very certain they want to retire there for good and the price paid for the property is only a small fraction of their total net worth. So can resell or not next time won't affect much.

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Good move. Monthly bank loan is one thing, paying high maintenance fees is another killer......

sgcount said:

Yah that's quite true. But too late now... Bought into Medini purely for investment. Will work out the math this weekend to see if it's worth it to dump the property at a loss now.

The liability from paying monthly bank loans for more than 10 years (a possibility and really a long time from an investment perspective) without any rental income and steadily declining RM currency are quite hard to swallow for me. No exit strategy also as I don't foresee any buyers.

Probably won't matter for those who are very certain they want to retire there for good and the price paid for the property is only a small fraction of their total net worth. So can resell or not next time won't affect much.

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I don't think you are able to sell in today's climate without taking a huge hair cut, maybe 30%.

Capitaland consortium fulfils conditions to buy Danga Bay land parcels

PUBLISHED ON JUN 26, 2015 7:03 PM

SINGAPORE - Capitaland said its consortium has fulfiled condition to acquire land parcels on A2 Island in Danga Bay, Iskandar Malaysia envisaged to be developed into a premier, the company said in a release on Friday.

A2 Island is envisaged to be developed into a premier waterfront residential community comprising high rise apartments, landed homes and other supporting amenities.

Capitaland's consortium, called Hallmark Connection Sdn Bhd (HCSB), had earlier signed an agreement with Iskandar Waterfront Sdn Bhd (IWSB) for the land.

CapitaLand owns 51 per cent of HCSB through its wholly owned subsidiary CLM Isle Investment, while IWSB and Temasek own 40 per cent and 9 per cent respectively.

According to Bloomberg data, Temasek also owns about 39 per cent of CapitaLand.

The development will be paced and executed in phases over a period of 10-12 years according to market conditions, as originally envisaged, Capitaland said in the release.

Earlier, it had also said that the acquisition and development of A2 Island will be financed by equity, external financing and sales proceeds from the sale of properties to be developed.

The three joint venture partners will contribute up to RM1.05 billion (S$404 million) in equity altogether.

- See more at: http://www.straitstimes.com/news/bu...nga-bay-land-parcels-201#sthash.FLUKIkwX.dpuf

FHBH12 said:

Capitaland consortium fulfils conditions to buy Danga Bay land parcels

PUBLISHED ON JUN 26, 2015 7:03 PM

SINGAPORE - Capitaland said its consortium has fulfiled condition to acquire land parcels on A2 Island in Danga Bay..........

The development will be paced and executed in phases over a period of 10-12 years according to market conditions, as originally envisaged, Capitaland said in the release.

Earlier, it had also said that the acquisition and development of A2 Island will be financed by equity, external financing and sales proceeds from the sale of properties to be developed.

The three joint venture partners will contribute up to RM1.05 billion (S$404 million) in equity altogether.

- See more at: http://www.straitstimes.com/news/bu...nga-bay-land-parcels-201#sthash.FLUKIkwX.dpuf

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Meaning there is no compelling reason to develop the land?
Maybe like Keppeland, that has owned land in JB very early on, it may end up holding for the long term.

If true then it'll be another nail in the coffin.
No development till the Iskandar authority shows progress.
It's a prudent move.
But given the pace from the Malaysian government it'll be long term.
For those flipping better think twice. Seems like this is more for the long haul.

sgcount said:

Yah that's quite true. But too late now... Bought into Medini purely for investment. Will work out the math this weekend to see if it's worth it to dump the property at a loss now.

The liability from paying monthly bank loans for more than 10 years (a possibility and really a long time from an investment perspective) without any rental income and steadily declining RM currency are quite hard to swallow for me. No exit strategy also as I don't foresee any buyers.

Probably won't matter for those who are very certain they want to retire there for good and the price paid for the property is only a small fraction of their total net worth. So can resell or not next time won't affect much.

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Why dont you keep it? Its not that expensive la my friend. You can just keep it for holiday home and who knows after 10 years Medini is another Shenton Way. You really never know. Years ago no one will guess East Ledang semis will shoot to RM 2.5 million from a RM 700k ( that time RM 700k was a record )

Actually it's not flipping. Flipping is to let go of the property quickly to make money. On the contrary, this is to cut loss. Either feel the pain now, or bleed intensely with much more pain years down the road. But I'm looking at it solely from an investor's point of view, not buying for own stay. It's a very expensive lesson.

There is a very huge oversupply right now. It's not hard to imagine even in the next 5 years, it is quite impossible to find buyers for all the current crop of unsold properties, let alone trying to sell a unit that has already been bought now. The last I heard, Country Garden has 9000+ units, of which only about a third was sold. And that's only one out of many units in the Danga Bay Area. What about the many other projects in Medini and the rest of Iskandar.

If it's just the Singapore media painting a bleak future of Iskandar, we can perhaps say it's only "noise". But it's the Malaysian side themselves who are revealing the same truth, including the JB MPs and UMNO. If all these people are not to be trusted, then surely the astute banks have to be believed. Even they are very cautious about loaning money now for Iskandar properties.

http://www.themalaymailonline.com/m...ee-foreign-optimism-meeting-poor-local-demand

According to the stats, there are more than 330,000 units in Iskandar, which took Singapore about 50 years to build the same number of private residential properties!

http://www.freemalaysiatoday.com/ca...building-boom-causes-bust-in-property-prices/

And Singapore is 3x smaller than Iskandar with more than 5 million population. Iskandar has much less. Moreover, with Forest City coming in, that's another 300,000 more properties to be added to Iskandar! Where will the buyers be coming from to buy the older, resale properties?

Some argue the 330,000 figure is exaggerated by the Singapore authorities. But it doesn't really matter. Based on the poor sales, reduced land sales and building by developers, the general negative sentiments, we already know the oversupply is not a small problem at all. It will take many decades for the properties to show some signs of moving.

The initial optimism of Iskandar was due to the (wrong) belief that businesses will be attracted to move to Iskandar due to the lower cost of setup. But many from Singapore have done so in the last few years and they relocated back to Singapore. I was told the admin inconveniences, lack of skilled staff and salary issues were some of the main reasons. A Malaysian would not be attracted to work in Iskandar when he or she could get much higher pay just across the causeway in Singapore with a stronger currency. This problem of not being able to attract businesses over is not easy to solve even in the mid-term.

Even if one thinks perhaps waiting 10 years later, the situation might improve. So suppose I have paid $x for my present Iskandar property. It is still unlikely that I will be able to sell it at $x or more given it will probably still be a buyer's market due to the humongous oversupply. Prices will likely be the same or maybe even lower than what I bought in 2013.

But once my bank loan starts, I will have to start paying principal + interest progressively while not earning any rental. (The next 2 years or so will see absolutely no money coming in as the property is still under construction.) Based on my calculation, the amount I will have spent at the 3rd year paying off the bank mortgage will already equal the amount I will lose if I give up the property now. After that, it's just continual losing of money.

Optimistically, even if I can find a tenant, the rental amount will very unlikely cover the monthly mortgage. I estimated I have to top up a few hundred S$ every month. It could be worse once the Malaysian banks increase their interest rate further, maybe to 5-6% in the next few years?

Add to that, if you look at the SGD vs RM currency exchange, the RM has continually been weakening. I'm not referring to only 2 or 3 years data but over the last 10 years! For those of us who bought our Iskandar properties in 2013, we would have already lost about 14% due to the currency exchange.

Someone told me, that's good news. It means you can buy Iskandar property cheaper! (That person obviously has vested interest in Iskandar. He sells Iskandar properties.) But the full picture is not painted. Look from another perspective, you are holding on to a liability that is losing value with time.

Even if you let go your property now, and later regret and say, I shouldn't have given up, I want to retire in Iskandar, it's not difficult to see that 5-10 years down the road, you will be able to buy back in at the same price or even lower than what you have bought now. The advantage is, by then, there is a good chance RM will have depreciated further and you are not losing money paying the bank mortgage if are still holding on the property now.

Why I will not buy an Iskandar property for own stay:

I am still relatively far from retirement. My work, family and friends are all deeply rooted here. I don't find it attractive at all to be spending 1-2 hours traveling each way from Iskandar back to Singapore. I admit I was fooled by the "15 mins" travel from Tuas/Woodlands CIQ to Iskandar as the developers often like to advertise. What they didn't tell us is that the jam we will experience there could hold us back for more than an hour. I've tried going via Woodlands on a weekday, either by car or bus, at about 12pm, and I was stuck for about an hour at the CIQ alone. Totally unexpected.

Why I don't treat it as holiday home:

To pay say S$300,000 for a modest size Iskandar property and use it as a "holiday home" is certainly very expensive! Even if you splurge S$250 every week to stay in a 3 star hotel in Singapore, you can enjoy 25 long years of relaxing "staycation" to equal the cost of buying an Iskandar property!

Some other notes about Iskandar Singaporean investors might have overlooked:

1. Don't assume the property market in Iskandar is like Singapore where there are ready tenants and buyers and you can make positive cash flow from your rental.

2. There is a possibility you may never be able to sell your property next time for decades. Some are not bothered by this as they say they are buying it for "own stay". But unless you are financially very stable and rich, I feel whether as an investor or buying for own use, it's more reassuring to know you can let go of your property. You never know when you need the money urgently or to put it to better use.

3. "But my friend told me he could rent out his apartment in JB and he even sold it for profit. So why should I be worried about my Iskandar property?" I've heard this being reasoned out several times. Check when that friend bought his or her JB property. It's very likely before 2012 when the Iskandar craze started to happen. Many of them bought their properties at very cheap prices back then, naturally they will be able to make profits. Iskandar is still largely being developed and the prices of properties sold are already at inflated prices now. Will locals buy it next time? Moreover, many of the properties are targeted at foreigners. Your pool of future buyers are a lot more limited, if they are even interested next time when there are so much supply to choose from.

4. HSR may be coming but that is not catered for daily travel to and fro from Singapore and Iskandar. The ticket is too expensive for the daily commuter. The project is also expected to delay indefinitely. What is more attractive is the RTS. That was supposed to be ready by 2018. But from the look of it, and the way the Malaysian side is handling the matter, it is almost as good as scrapped. Even with the RTS, it is to just ease the jam at the 2 CIQs. It's definitely better than the current situation, but traveling wise, I think the inconvenience of using it daily still remains to some extent.

All the above may not apply so much for those looking to retire in Iskandar soon, or if you have so much cash on hand (like many of those Chinese from China) you can't think of any better way to dispose of it.

I'm just sharing my thoughts aloud honestly. If you have opinions on Iskandar that are similar or different, please feel free to add on or share so that those who have bought (or thinking of buying?!!) Iskandar properties may learn.

PuteriWorld said:

Why dont you keep it? Its not that expensive la my friend. You can just keep it for holiday home and who knows after 10 years Medini is another Shenton Way. You really never know. Years ago no one will guess East Ledang semis will shoot to RM 2.5 million from a RM 700k ( that time RM 700k was a record )

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Thanks Puteri World. I've just shared some of my thots above. See if you agree.

I actually have the holding power but if the property is not making me money but taking out money from me for years, it's rather painful.

Sorry lah, I'm just a salaried worker trying to invest in Iskandar. I know S$300+k is actually a small amount to many. But for me it's hard earned money. I was trying to create a passive income for myself through Iskandar but seems like there were many important points I didn't consider carefully back then!

Ya lor. I talked to my friend who is a Senior govt servant earning S$5000 a month. He also regretted buying a property within 5 min walk from CIQ in Woodlands. He got a landed house in Singapore which will belong to him after the owner kick the bucket. I told him to retire in Singapore with a free landed house. Its probably better for him even though he claims to be struggling with cost of living of buying a HDB flat + instalment for cars and kids tuitions.

In your case you shouldn't be buying solely for investment. I know of so many people around me who buy into those "Pay RM8888 to owe a landed house" schemes in Iskandar just because they see their relatives or friends earning millions of profits. These chaps only been to Bukit Indah once and they are buying houses already without thinking if they will ever stay there. In fact, many buy and let their house be vacant cos the excitement dies down after a while.

Those with relatives or semi-retired or cheong JB for massage + petrol drills might be more suited to buy houses in Malaysia. Those throwing all their lifelong savings hoping to earn millions are going to be screwed badly. My advice for all Singaporeans. Stop buying for investments. Buy for your own needs or retirement or to house your mistresses etc. If you go to Malaysia only once in a few months, never buy the properties there.

sgcount said:

Thanks Puteri World. I've just shared some of my thots below. See if you agree.

I actually have the holding power but if the property is not making me money but taking out money from me for years, it's rather painful.

Sorry lah, I'm just a salaried worker trying to invest in Iskandar. I know S$300+k is actually a small amount to many. But for me it's hard earned money. I was trying to create a passive income for myself through Iskandar but seems like there were many important points I didn't consider carefully back then!

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sgcount said:

Thanks Puteri World. I've just shared some of my thots above. See if you agree.

I actually have the holding power but if the property is not making me money but taking out money from me for years, it's rather painful.

Sorry lah, I'm just a salaried worker trying to invest in Iskandar. I know S$300+k is actually a small amount to many. But for me it's hard earned money. I was trying to create a passive income for myself through Iskandar but seems like there were many important points I didn't consider carefully back then!

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When you said you were trying to create a passive income from yr Iskandar property, what are the numbers you were working on?
Using the rental to offset the monthly installment with a surplus?
How much surplus to qualify a passive income?
What was the rental yield you tot would be?
What was the rental and resale market scenario you were provided?
Some basic questions one should consider seriously when investing.

sgcount said:

Thanks Puteri World. I've just shared some of my thots above. See if you agree.

I actually have the holding power but if the property is not making me money but taking out money from me for years, it's rather painful.

Sorry lah, I'm just a salaried worker trying to invest in Iskandar. I know S$300+k is actually a small amount to many. But for me it's hard earned money. I was trying to create a passive income for myself through Iskandar but seems like there were many important points I didn't consider carefully back then!

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What i can say is that you are a pragmatic and straight forward person. If you pull out now, how much will you expect to lose?

If you want to enjoy passive income from property, I suggest buying some SGX's REIT (Real Estate Investment Trust). Very clean cut , very hassle free, can be bought and sold easily. Be patient and buy when recession hit. You don't need to hold physical property to enjoy rental income.

sgcount said:

Thanks Puteri World. I've just shared some of my thots above. See if you agree.

I actually have the holding power but if the property is not making me money but taking out money from me for years, it's rather painful.

Sorry lah, I'm just a salaried worker trying to invest in Iskandar. I know S$300+k is actually a small amount to many. But for me it's hard earned money. I was trying to create a passive income for myself through Iskandar but seems like there were many important points I didn't consider carefully back then!

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enjoylife77 said:

If you want to enjoy passive income from property, I suggest buying some SGX's REIT (Real Estate Investment Trust). Very clean cut , very hassle free, can be bought and sold easily. Be patient and buy when recession hit. You don't need to hold physical property to enjoy rental income.

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Yes, indeed. I agree.

ZigZag said:

What i can say is that you are a pragmatic and straight forward person. If you pull out now, how much will you expect to lose?

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Har, is it? I guess it's because I am viewing it strictly from an investor's point of view. So now, I am looking only at numbers, facts and logical/reasonable projections, which I didn't consider when I went in. A big mistake.

I wish I could be like some of the bros here who say they are buying for retirement or treat it as holiday home. I need to have a lot more $ to be able to do that.

I trusted the agent who sold me too much. One day, he finally whatsapp me to say actually, he has not been in the property scene for a few years already. My heart sank deep! I knew that guy had nothing in mind except to earn commission from my purchase. I was stupid and didn't do enough research.

I have read a lot more in the past 2 years and spoke to a few experts in the business. Become more knowledgeable now than before (but still learning) and that's why alarm bells on Iskandar started ringing inside me only recently.

Will lose about S$50k if I give up. Very painful. But just afraid if keep longer, the pain will likely be more unbearable.