Property News

sgcount said:

Despite all the negative comments, Ryan Khoo does it again! His articles are fill of inspiration for those who want to invest in Iskandar. Basically, he thinks Singapore-Iskandar is the same model as the HK-Shenzhen story. So Iskandar population will boom in future, manufacturing companies are moving from Singapore to Iskandar, and many will feel that Singapore properties are too expensive to buy.

Iskandar Malaysia: Why are the Chinese here?
By Ryan Khoo / Alpha Marketing, The Edge Property | June 30, 2015 9:00 AM MYT

When news broke out in early 2013 that Country Garden, a top 10 Chinese developer had bought land in Iskandar Malaysia, the response was quite positive and highlighted that Iskandar was able to attract other international investors than just Singapore. Fast forward 18 months later to late 2014, a slew of other Chinese developers such as R&F Guangzhou and Greenland Group entered the Iskandar property market as well.

However it was still Country Garden that created the biggest stir by announcing details of their massive 3,400 acre Forest City development off the 2nd Link between Singapore's Tuas and Johor's Nusajaya.

Why are the Chinese so interested in Iskandar Malaysia? What is so attractive for them to invest millions into the region?

1. A replica of the Hong Kong - Shenzhen story

Country Garden and R&F Guangzhou, arguably the 2 developers with the biggest investments in Iskandar Malaysia, are both developers from China's southern Guangdong region. Both developers have seen the growth of Shenzhen and Guangzhou in the 80s and 90s driven by large economic spillovers from Hong Kong and increased high-speed rail connectivity within China. To the Chinese, Singapore and Iskandar present very similar dynamics with the High Speed Rail (HSR) and the Rapid Transit System (RTS) being the key catalysts. Manufacturing will be the key economic driver just like Hong Kong and evidence shows that this is already the case. According to the Malaysian Investment Development Authority (MIDA), Johor state enjoyed the highest committed manufacturing investments in Malaysia in 2013 (RM14.4bil) and 2014 (RM21.1bil), beating heavyweights Kuala Lumpur, Selangor and Penang. And Singapore still retains its position as the biggest foreign investor in Iskandar, reflecting the on-going migration of Singapore manufacturers into Johor.


2. Expectations of a population boom in Iskandar a.k.a. Shenzhen

Shenzhen back in the early 80s was basically a collection of fishing villages and a relatively small population. As then Chinese leader Deng Xiao Ping kick-started economic reforms across China, Shenzhen was opened up as a free trade zone betting that Hong Kong companies would come over due to the much lower costs. Shenzhen's maturity took 10-15 years and in that time frame, thousands of jobs were created and people from all over China moved to Shenzhen to take advantage of the jobs opportunities created. Today, you will see that many people living in Shenzhen are actually not Shenzhen natives and are from other parts of China. And this is what the Chinese developers are looking at when they see Iskandar - Singapore. Iskandar's population today may only be in the 1.6 - 1.8 million range, but an accelerated push to the 3 million target is an easy target in the eyes of the Chinese since Malaysia has hit a 30 million population.


3. Private property Singapore gets more expensive in the medium term

Singapore private property prices have fallen 4% in 2014 and probably another 4-5% in 2015. If expectations are that some cooling measures will be relaxed in 2016, it looks like those who are waiting for Singapore private property prices to plummet further are going to be disappointed. If a majority in Singapore still see prices as too high even after the cooling measures, what more when the property cycle turns upward again in 3-5 years? More and more Singaporean residents will find Iskandar Malaysia an enticing option, as a 2nd property in Singapore becomes increasingly expensive and un-attainable. Out of Singapore's 5.5mil population, there are more than 2mil who are non-citizens, many of whom are Malaysians working in Singapore who might be priced out of the Singapore private market and more amenable to buying homes in Iskandar.


4. An Aging population in Singapore

Like Hong Kong, Singapore faces an aging population problem. If not for immigration, both countries would be facing an abnormally low birth rate and a higher median age. The median age in Singapore is 40.4 years while in Hong Kong its 42.8 years versus Malaysia's young 27.7 years. As the living environment, security and transport links in Iskandar improve, many in Singapore will see Iskandar Malaysia as a viable option for retirement and to reduce healthcare costs. Singapore will have 900,000 residents aged 65 and above by the year 2030; a big market for various services that Iskandar Malaysia is poised to offer.


5. Chinese property buyers are going global

According to the Chinese luxury events group Hurun Report, one in three wealthy Chinese own properties overseas. Both Malaysia and Singapore are in the top 10 countries where Chinese own properties and in the first half of 2014 alone, US$5.4 billion of overseas properties were bought by the Chinese. The Malaysia My Second Home(MM2H) program offers a multi-entry 10 year visa for the applicant as well as their direct family members and the Chinese are the highest number of applicants in 2013, 2014 and 2015 thus far for the MM2H program. As the Chinese middle class expands and more and more Chinese travel abroad, Iskandar Malaysia will enjoy increased visibility driven by the Chinese property developers who are present here.


6. Chinese companies doing business in South East Asia

Chinese companies are rapidly expanding globally. South East Asia is no exception. Greenland Group's decision to develop some 3,000 acres of industrial land at Pasir Gudang in partnership with the Johor government is a signal that Chinese manufacturers see Iskandar favourably and are looking for proper solutions. Many Chinese businesses are flush with cash and looking to produce and market their products globally. One example is in the rail business. Chinese rail companies are in the running to build the HSR and RTS. If they clinch either or both projects, expect to see a flood of Chinese contractors and specialists to start business in Malaysia. In fact Chinese construction companies are bidding heavily for projects across South East Asia as many countries here upgrade their infrastructure.

While the general public may dismiss the Chinese property developers as being overconfident or even irresponsible in Iskandar Malaysia, it would do well for us to remember that these developers are giants and that their decisions to come to Iskandar Malaysia are not made lightly. Their investments in Iskandar Malaysia could pay off in the long run as they rush to landbank the best land plots today and bide their time for the above trends to play out and then their investments will bear fruit. Even if 50% of these trends take place in a small way, it is already a big boon to Iskandar Malaysia which today is still at a low base comparatively.

http://www.theedgeproperty.com.sg/content/iskandar-malaysia-why-are-chinese-here

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snowbird said:

This author had forgotten one very important fact when making comparison with Hong Kong / Shenzhen.
Shenzhen is part of China while Hong Kong is a Chinese SAR with direct China's influence on policies while the HK Chief Executive have to report directly to Beijing every year.. China can and is able to control these 2 cities top down while SG and MY are 2 entirely different country

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xebay11 said:

Possible in the next 5 to 10 years, this is my observation from the past 5 years, the onslaught into JB is growing as sinkies get poorer and spending power gets weaker by the years.

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sgtsk said:

From Reuters
Aug 18 Singapore-based wealth managers, already under pressure from a global move towards tax information sharing, face a more immediate threat as Asian countries including Indonesia and India look to chase undeclared money in the low-tax city state.

A global crackdown on tax evasion launched during the 2008 financial crisis has already forced Switzerland and other European offshore hubs to surrender their prized bank secrecy.

Like those centres, Singapore has committed to automatically start sharing information with foreign tax authorities from 2018, in line with an agreement signed by more than 51 countries last year that seeks to put an end to tax evasion.

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mpan12 said:

How do you come to this conclusion? I did some volunteering 3 years ago to help the old folks, and I also come across many Singaporeans from all walks of life, from the cleaner at my workplace to secretary, executives and managers. I also speak with the very rich investors who are already retired or semi-retired at 50 years old. I don't find there is any specific category of SG citizens that are highly contemplating moving to Johor simply because they are poor/rich.

For those who are struggling to make ends meet, they are still staying put in SG. They are usually firm government supporters and receive aids from welfare organizations. Some of them own old 3-room HDB flats. If they sell them away, I reckon they could buy nice condos in Puteri Harbour with some spare cash to spend. But none are doing this.

I think there's a lot more factors to "push" one out of the country, not just the lack of money alone.

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Tekkun said:

If I remember correctly, when Indonesia had its riots some years back, rich Indonesians came to Singapore banks with cash in suitcases.
Wonder if it is true or is it just grapevines flying around.

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Tekkun said:

If I remember correctly, when Indonesia had its riots some years back, rich Indonesians came to Singapore banks with cash in suitcases.
Wonder if it is true or is it just grapevines flying around.

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eatshitndie said:

never trust so called property gurus who are invested in iskandar to upsell iskandar. of course they will. it's like bringing more clueless and innocent victims to the slaughter to drown their own agony and pain.

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mpan12 said:

How do you come to this conclusion? I did some volunteering 3 years ago to help the old folks, and I also come across many Singaporeans from all walks of life, from the cleaner at my workplace to secretary, executives and managers. I also speak with the very rich investors who are already retired or semi-retired at 50 years old. I don't find there is any specific category of SG citizens that are highly contemplating moving to Johor simply because they are poor/rich.

For those who are struggling to make ends meet, they are still staying put in SG. They are usually firm government supporters and receive aids from welfare organizations. Some of them own old 3-room HDB flats. If they sell them away, I reckon they could buy nice condos in Puteri Harbour with some spare cash to spend. But none are doing this.

I think there's a lot more factors to "push" one out of the country, not just the lack of money alone.

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snowbird said:

Another event to watch out is the relationship between China and the Philippines.
The new Pinoy President had already shown willingness to be closer to China and at the same time distancing from the US.
He is even requesting the US military adviser to leave the Philippines. http://www.wsj.com/articles/duterte...tary-advisers-from-the-philippines-1473692769
He is welcoming Chinese money into the country and you may see Chinese developers rushing there like they did in MY and may be even paying more attention there and neglecting MY.

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snowbird said:

Agree
These people either forgot or trying conveniently to leave out important information
Of all the items he mentioned, only one point is relevant - Iskandar makes a great place for retirement for people coming from countries of higher cost of living, example like SG.

Making comparison of JB/SG to Shenzhen /HK is totally out.
In fact Shenzhen is already way pass the progress of KL by leap and bounds.
A simple comparison KL / Shenzhen :

Population : 1.7 mil / 10 mil
GDP per cap : US$19,000 / US$ 25,000
Stock Market Cap : US$189 billion. / US$2.2 trillion
So, will the MY govt allows JB to even match KL in progress and development, NO WAY!!
Hence, JB will always be that small little city great for retirees to settle there and those who still think that one day JB will be transformed into a bustling cosmopolitan city may be thoroughly disappointed in time to come.

Another event to watch out is the relationship between China and the Philippines.
The new Pinoy President had already shown willingness to be closer to China and at the same time distancing from the US.
He is even requesting the US military adviser to leave the Philippines. http://www.wsj.com/articles/duterte...tary-advisers-from-the-philippines-1473692769
He is welcoming Chinese money into the country and you may see Chinese developers rushing there like they did in MY and may be even paying more attention there and neglecting MY.

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mpan12 said:

How do you come to this conclusion? I did some volunteering 3 years ago to help the old folks, and I also come across many Singaporeans from all walks of life, from the cleaner at my workplace to secretary, executives and managers. I also speak with the very rich investors who are already retired or semi-retired at 50 years old. I don't find there is any specific category of SG citizens that are highly contemplating moving to Johor simply because they are poor/rich.

For those who are struggling to make ends meet, they are still staying put in SG. They are usually firm government supporters and receive aids from welfare organizations. Some of them own old 3-room HDB flats. If they sell them away, I reckon they could buy nice condos in Puteri Harbour with some spare cash to spend. But none are doing this.

I think there's a lot more factors to "push" one out of the country, not just the lack of money alone.

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Tekkun said:

JOHOR BARU: A manufacturing company from China, specialised in Industrialised Building Systems (IBS), is expected to invest some RM1bil to set up a facility in Johor.State Domestic Trade, Consumerism and Tourism Committee chairman Datuk Tee Siew Kiong said that the company is keen to expand its operations in the Gelang Patah area here.“We are already in the final stages of discussions on the project which will also create some 400 job opportunities for the local community,” he told reporters after launching a new showroom for Ginmit Trading Sdn Bhd here.IBS is a technique of construction where components are manufactured in a controlled environment, either at site or off site before being assembled at the construction area.Tee noted the state government encourages the IBS project as it is in line with the roadmap to reduce the country’s dependence on foreign workers.A 40.47ha plot of land in Gelang Patah has been identified for the project.

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rotikok said:

1. I think you get it wrong, comparing different time zone. Those PRC are comparing Shen zhen back in china economic reform era, the time when shen zhen is even ulu than JB. It was classified as special economic zone back in 1979 while Iskandar was formed in 2007, under this logic and comparison, there are many years ahead. There are political risk too back in 1979 when HK only officlally return to china in 1997, 18 years of political risks dealing with Great Britain and PRC and way more uncertainties since people do not know how future will look like, whether got war etc. ALso back then HK ppl were worry about communists coming, many fled to UK, divest to other countries but Li Kah Shing was outsmart them by buying up land asset during panic period. Good example of not following the herds. I think when you reach the age of retire, looking back, you might laugh at yourself, did not learn from history, following herds for avoiding iskandar. BUying HK is diff one may say since it is liken as SG, but back then LKS dint buy HK, buy Shenzhen also on the right gaining side, the key is not buying on which side, is buying on depressed time, buying on timing. The real risk for iskandar, aside political, is the population growth. Shenzhen bcoz of massive population doesnt mind 户籍制度 （dunno how to translate that) willing to come without enjoy the similar perks and rights enjoys by the locals province ppl. And malaysia is quite sensitive and xenophobic when too many outsider coming (but then they are fine with darker skin ppl, dunno why)

2. I think even Sultan himself know winning over KL is quite unlikely, since he only inspire to be malaysia second biggest city (which already are, only several indicator still lose to penang.). But what make you think that winning over KL is impossible? Never in history able to prove that one city is always greater...even KL, what make them to always have the lead? Bcoz of capital city status? Well, Canberra, New Dehli and many more are capital that are not the biggest city. The only thing that make KL the great in malaysia is not the population, is the economy/industrial made up, the city is more mature in the way because they were developed much earlier and much focus by the government. But then KL is not international enough to begin with, and Klang valley got many downside....so I think Iskandar, under right and open policy, will be greater than KL in the span of 30 years (ok that is my self made figure). Only economy is good, the population will come, so comparing current population is not so important as it reflect how successful the economy of the city does. Rather the focus should be the policy that the authority made, years down the road, it will have impact on the economy and ultimately population growth. So will iskandar grater than KL? From what i see, policy made to implementation.... a big NO for now, but subject to changes when authority make game changer policy (and implement) to iskandar.

3. Current new party, Pribumi, I see it will do good to Johor, Muhyiddin was former Johor Menteri besar before Ghani, and is current Pagoh MP. One of the stop in Muar might actually located near Pagoh Univerity town that already on making. If opposition win and Pribumi is the big brother, then likely it will be good to Johor as a whole. However if BN continue to rule, Penang and KL surely will be opposition, they should know where to treat nicely. Anyway just wild guess la....no one know what is going to happen.

4. PRC are not stupid, Philippine when president change again, everything will change. You see Vietnam riot burning Chinese asset, end up Taiwanese kena the most, because PRC not investing much in Vietnam to begin with since they knew the underlying risk. The latest lesson they already learned from Burma. Maybe SOEs some will come, force by China gov, to symbolise repair tie, but do you really think Chinese SME or those listed companies dare to come Philippine, with their ah beng president? Suka suka everything kena makan, even dangerious than Lee Kuan yew said "with a stroke of pen", they are with a bullet of gun. Phillipine economy much like Indonesia, control by the local chinese minority, better way is to proxy them or collaborate with them like Genting did. PRC come in en masse, they are mad isnt? Too much money dunno where to spend, with the sovereignty conflict, buy there any time kena chop and tok by parang. You think China developers will go there, when average chinese not wanting to go there, who are they going to sell to? Even forest city country garden advertisemnt state clearly is "beside singapore"....not even mention malaysia.
So I think you over read the news and overstating the "might have" impact.



QUite right, too old and conservative unwilling to move unless got ppl bring them. Too poor really hard as those who moved that i know at least got a singapore car. Then those still working also unwilling to move. Too rich if move surely to better developed countries, they do not even bother about cost of living. Those who moved, that i know, actually quite well doing, work more flexible, able to car pool, and/or retire. This is the reality and current scenario, inconvenience win compare to the monetary incentive to move. Well, I see a big market then if inconvenience lighten by big game changer.

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xebay11 said:

Smells fishy, after Singapore, Malaysia is second highest cost in SEA.

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Tekkun said:

JOHOR BARU: A manufacturing company from China, specialised in Industrialised Building Systems (IBS), is expected to invest some RM1bil to set up a facility in Johor.State Domestic Trade, Consumerism and Tourism Committee chairman Datuk Tee Siew Kiong said that the company is keen to expand its operations in the Gelang Patah area here.“We are already in the final stages of discussions on the project which will also create some 400 job opportunities for the local community,” he told reporters after launching a new showroom for Ginmit Trading Sdn Bhd here.IBS is a technique of construction where components are manufactured in a controlled environment, either at site or off site before being assembled at the construction area.Tee noted the state government encourages the IBS project as it is in line with the roadmap to reduce the country’s dependence on foreign workers.A 40.47ha plot of land in Gelang Patah has been identified for the project.

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snowbird said:

As I've said before several timers, this is the kind of industry Johor attracts and will be attracting - low-tech manufacturing, large cheap spaces for factories and warehousing, polluting, plenty of low-skilled and semi-skilled workers, etc.Will to little to make JB a cosmopolitan city.

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Tekkun said:

Who bothers if JB is not a cosmopolitan? All Iskandar want is investments. It welcomes anything and everything. As long as its own people has got jobs, that all it matters.

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