My employer took a bus load of high networth clients to Iskandar today. I believe most of the properties shown to them will be off-plan condominiums. I believe the water front condos are already priced in. At over RM800 psf, I would not touch it. Worse still are condos with no special features. When I mention "special" I meant being near MRT stations and having water frontage. Nothing else will do.
If you think that landed properties are of better value, I can tell you that it has also been priced in. Most gated bungalows are selling for RM 400 - 600 psf. That's just about right.
Most of these properties have no resale value. The developers have so much land that they will keep selling and selling. Property owners will also fail to find good tenants. This is a classic case of a property bubble. Uncontrolled release of land will cause property prices to eventually fall.
80% of the capital appreciation is already over. If you wish to buy now, you are reaching the tail end of the bull run.
I ve always liked your insightful posts. What do you think of the Iskandar freehold commercial shophouses, especially in estates like Tanah Sutera, Permas Jaya, or Bukit Indah?
ReplyDeleteHi, thanks for your compliments. I looked at some shop houses in Bt Indah. Unless you can get 6% gross yield and above, no point investing. I believe most shop houses in JB are asking for around 4 - 5% gross. The problem is foreigners are only allowed to invest in 3-storey shophouses. Only the ground floor is valuable. The 2nd and 3rd stories are usually either used as servant quarters or offices which yield very little. Never ever touch office space because occupancy in KL and JB is below 75%.
DeleteThank you for all the info.
ReplyDeleteWhat is your view of the Desaru area, with the RAPID project, with more jobs and workers coming in? There is a township area in the development phase. I have heard from some locals that there are not enough lodging as more and more workers are coming in and new houses are not ready.
Thanks
RL
Hi I'm not sure about the RAPID project. I have not really read it in detail. But if it's for blue collared workers, then will you rent your spanking new bungalows to them, cram 20 workers into your 10k sf palace hoping to get 10k rental? I doubt it will be in livable condition after that. If you're referring to investing in very cheap condos there, like 100 - 200k, then yes. But foreigners cannot buy them. If you're building a workers' accommodation, then maybe it's a good idea.
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