Johor’s new high-end high-rise homes may dip below their launched prices this year

PETALING JAYA (Feb 1): The high-rise residential market in Johor’s Iskandar Malaysia has softened in 2016 with lower transaction prices in the subsale market.

The outlook for the market segment looks challenging with higher vacancy rates expected in 2017, according to CBRE | WTW Johor.

“High-rise residential units from the high-end segment may be transacted at about 20% lower from their launch prices.

“This is mainly because many owners have purchased these properties from the primary market through DIBS (Developer Interest Bearing Scheme),” said CBRE | WTW Johor branch director Tan Ka Leong.

It is unlikely to see a dip in prices among units in the affordable high-rise residential segment, where their launch prices were below RM600 psf, he told TheEdgeProperty.com.

In the real estate consultancy’s report “2017 Asia Pacific Real Estate Market Outlook: Malaysia”, it stated that Johor’s existing supply of high-rise residences in 2016 stood at 43,898 units, an increase of 16% from 2015.

“Our in-house survey found that about 15 high-rise residential projects were completed in 2H2015, contributing 9,025 units to the market, with nearly 50% of them in Iskandar Puteri.

“All these newly completed developments recorded fairly low occupancies of less than 30%,” said the report.

On the subsale market, the average transaction value for this segment stood at RM370 psf in 2016, about 11% lower than 2015. Transaction volume had decreased by 50% from the previous year.

“The highest transaction price recorded in the subsale market was for units within KSL City D’Esplanade, with a price of RM730 psf, followed by Sri Samudera and Zenith Suites with units transacted at about RM460 to RM470 psf,” the firm noted in the report.

The report also noted that more than 13,000 units of the mega development Forest City by Guangzhou-based developer Country Garden Properties Sdn Bhd have been sold of which 75% of them were purchased by Chinese buyers. Prices for the condo units are from RM1,200 onwards.

2017 will see about 19,000 units of high-rise homes coming into the Johor market.

Buyer’s market for Johor terraced homes

On landed homes, CBRE | WTW said the market is expected to remain a buyer’s market this year.

The supply of landed homes in 2016 stood at 294,694 units where terraced homes took up 93% of the total supply.

“The amount of landed homes is expected to increase by 13,584 in the next few years, comprising 91% of terraced homes, 7% semi-detached and 2% of detached homes,” said the report.

In the subsale market, 2-storey terraced houses were transacted at RM321 psf as at August 2016 — about the same as in 2015 while transaction volume had decreased by 40%.

In older residential areas such as Permas Jaya (RM300 psf), Taman Perling and Taman Pelangi (between RM275 and RM285 psf), higher transaction values were recorded.

Prices of 2-storey semi-detached homes had dropped by about 10%, having transacted at an average of RM488 psf in 2016. Transaction volume had decreased by 40%. As at August 2016, the highest transacted price for this property type was recorded in East Ledang (RM702 psf), followed by Taman Pelangi (RM588 psf).