How to Play Iskandar If You Really Must.... Show Me The Money!

I've been writing about my cautious approach to investing in Iskandar. The key beneficiaries in the Iskandar boom are NOT the following:

 

1. Foreigners who bought condos after 2012.

 

2. Foreigners who paid over RM700 psf of land (for houses) or strata (for condos).

 

3. Foreigners who paid over RM1m for condos or over RM2m for houses.

 

Everybody thinks that the Sing - Malaysia MRT is a given. I honestly would not count on it. There is a 100% chance that it will be delayed by over 5 years (completion in 2023 instead), 75% chance that it will be delayed by over 10 years (completion in 2028) and 50% chance that it may not be completed at all!

 

As for the talk of all the politicians, governments, and famous businessmen putting money into Iskandar, has any money actually changed hands or is it just an option signed for that piece of land with plenty of show-and-tell with promises of extravagant projects?

 

Read the two articles below to know what I mean.

 

 

http://sg.news.yahoo.com/blogs/property-blog/factors-aware-invest-iskandar-johor-090413664.html

 

http://walkingproperty.com/2013/08/why-i-am-taking-a-wait-see-approach-for-iskandar-malaysia-property/

 

For the believers of Iskandar, let me give you one word of advice; in any business venture, you always demand a 50% money down from your partner so that the pain is equal. What has the Iskandar government put down in the last couple of years? LEGOLAND, Hello Kitty, everything is done with foreign money. The easiest and most immediate things that the Iskandar authorities can do are to :

1. Double the police force and pay them well, so that crime rates can be drastically reduced, and contracts enforced.

2. Show all caveats lodged of historical transactions, right down to the unit number. This is available in UK, US, Ireland, Singapore and Hong Kong. So why can't this be done in Malaysia if you want greater investor confidence?

3. SHOW ME THE MONEY. Put money where your mouth is. Show us the time line for building the MRT line and actually start drilling. I'll be waiting eagerly for point 3 to happen sometime in 2014. This requires government money and if it's delayed, investor confidence could tumble.

 

 

 

 

Finally, I am not against Iskandar at all. I hope with all my heart that it will be a success and become Singapore's hinterland. But deep inside, the sceptical part of me persists and it has been proven right time and again.

If you really must buy a house in Iskandar and believe in the story, then take this advice from me, which is a 100% certainty: BUY A RESALE UNIT INSTEAD OF AN UNCOMPLETED PROPERTY. Refer to my previous posts about the risks of investing in uncompleted properties!@ Why buy new when there is obviously an influx of supply in the next 5 years in Iskandar?? There should be a recession by 2015 / 16 and I'm very sure that some foreigners will sell their completed homes as they cannot find enough rental to cover their mortgages!!