Tan Ka Leong

KUALA LUMPUR (Jan 17): Iskandar Malaysia’s high-rise homes market may have bottomed out as the fall in transacted values have slowed, while transacted volumes have grown substantially, said CBRE|WTW Johor.

Despite the lacklustre performance of the overall property market performance in the economic development region of Malaysia’s southern state last year, the sub-sale market has thrived — especially for high-rise homes which saw a 35% year-on-year (3Q16-3Q17) increase in transacted volume, against a 50% drop between 3Q15 and 3Q16.

“The worst seems to be over for the high-rise residential market in Iskandar Malaysia, because in terms of transacted value, we saw a moderate 5% drop (3Q15-3Q16: -15%),” said CBRE|WTW Johor branch director Tan Ka Leong at a media briefing on the 2018 Asia Pacific Real Estate Market Outlook today.

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“New launches have slowed down, which would mitigate the oversupply situation on short-term prospect, but immediate supply still remains on the rise. In 2017, there were almost 30,000 high-rise homes completed and came into the market, a 70% increment from the existing supply in 2016.

“Until 2019, although in a smaller scale, about 21,000 new high-rise homes will still enter the market, bringing the existing supply of high-rise homes to about 93,000 in Iskandar Malaysia. Among the looming supply came from mega developments such as Country Garden Danga Bay, Princess Cove, D’Secret Garden and Teega Suite.

“Half of the newly completed units are located within Danga Bay and Tanjung Puteri in Johor Bahru city centre. Developers are well aware of the challenges in selling high-rise homes, so we have seen fewer new launches since 2015," he added.

Tan also noted that affordable homes remain a favourite product among homebuyers — especially landed ones.

“Developers are focusing more on landed homes instead of high-rise homes now. They are trying to offer products priced between RM400,000 and RM600,000 for terraced homes.

“Many new launches are also taking place in suburban areas such as Skudai and Pulai where smaller landed homes are built with a cheaper land cost and carry an affordable price tag of about RM500,000.

“On average, the annual supply of landed homes hover around 3,000 to 4,000 units. In 2017, about 6,700 landed homes were completed but that is still a manageable amount. In 2018 and 2019, we expect the supply to go back to the average of 3,000 to 4,000 homes per year," he said.

In the sub-sale market, terraced homes saw a 10% increase in its transacted volume (3Q15-3Q16: -40%) and 2.5% dip in transacted value (3Q15-3Q16: -5%), while semi-detached homes maintained a drop of 40% in transacted volume and saw a 5.5% decrease in its transacted value (3Q15-3Q16: -10%).

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