PUBLISHED JULY 05, 2013
Klang Valley a cheaper alternative to Johor
Long-term view: Klang Valley, comprising Kuala Lumpur and its surroundings and suburbs, is expected to have 10 million residents by 2020. - PHOTO: BLOOMBERG
WARY of Johor's escalating property prices? An investment bank has suggested that homebuyers head back to Klang Valley, where the approval of at least one - if not two - Mass Rapid Transit (MRT) line is pending.
Maybank-IB also points out that the Klang Valley in central Selangor, comprising Kuala Lumpur and its surroundings and suburbs, is also home to between five million and six million people; this is targeted to expand to 10 million people by 2020, which makes for a market buoyed by sustainable demand and primed for growth.
CEIC data underscores just how heated Johor's property market has been: Its House Price Index (HPI) surged nearly 16 per cent year-on-year in the first quarter until end March.
This was more than twice the national average growth of 6 per cent, and higher than Penang's rise of 7.8 per cent, and Kuala Lumpur's 6.8 per cent.
By state, Selangor's 3.1 per cent was more muted.
On a quarterly basis, house prices contracted as buyers held back because of the May general election mid-way through the quarter.
Even so, Johor's HPI was the least affected, contracting by just 0.5 per cent; Kuala Lumpur's shrank by 4.5 per cent and the national average, by 2.6 per cent.
Notwithstanding the sharp jump in prices in Malaysia's southern-most state, the incoming supply of properties in the next few years, especially of high-end condominiums, is perhaps of greater concern.
It underpins Maybank- IB's call to investors to refocus on the Klang Valley, with its planned improvements in transport infrastructure and larger population.
Better public transportation is crucial to Klang Valley's growth.
The first MRT line there is expected to be completed in 2017, and the remaining two lines by 2020.
Demand for properties near the MRT stations has been especially robust, and builders are awaiting news of the next line.
MRT contractors have urged the government to get cracking to trim the amount of idle time for tunnelling equipment and labour between the lines. At its peak, some 13,000 people are expected to be deployed on the job.
The government land awards are also going to be closely watched in the coming months.
As the owner of a few large choice tracts of land in land-scarce Klang Valley, the state is under pressure to ensure that some of this land is carved out for affordable housing, although it seeks to maximise the value of its landbank.
One plot, for example, is in Sungai Buloh, the starting point for the first MRT line ending in Kajang.
The Employees Provident Fund, the country's biggest pension fund and a government-related investment fund, owns 1,215 hectares of land there, where the Rubber Research Institute of Malaysia used to be.
An "iconic township" is to be developed over the next 10 to 15 years, with media reports stating that parcels of between 40 and 202 hectares could be tendered out.
For iskandar, if singaporeans don't come, the chinese don't come, then what will happen ? No eye see.....
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