Claims of housing glut in Iskandar inaccurate, says IRDA

JOHOR BAHRU (July 1): Demand for medium, affordable and low-cost housing in Johor’s Iskandar region remains strong, says Iskandar Regional Development Authority (IRDA) chief executive Datuk Ismail Ibrahim.

To describe the market as experiencing a “housing glut” is “inaccurate”, he adds.

“The housing market [in Iskandar] is highly segmented, from the very low-end to the luxurious. If there is any glut, it is limited only to the high-end, high-rise and high-density segment which mainly comprises serviced apartments,” Ismail tells The Edge Property.

He was responding to a statement about the risk of housing glut in Iskandar by London-based property agency, Black Brick.

Black Brick founder and managing partner Camilla Dell, in referring to a warning of housing glut in Iskandar by the Monetary Authority of Singapore and the Consumers Association of Singapore, had said that deferred property launches, softening prices and sharp increases in housing supply are potential indicators of a looming price collapse.

Ismail concedes there is a slowdown in demand for the high-end landed segment, but says there is inadequate supply in the medium, affordable and low-cost segments.

“Strictly speaking, there is no such thing as a housing glut in Iskandar Malaysia,” he reiterates.

KGV International Property Consultants (Johor) Sdn Bhd director Samuel Tan concurs that low and low-medium cost houses and flats segments are seldom short of  demand.

“In fact, out of the 102,949 incoming supply of units in Iskandar, 19,242 units are actually low and low-medium cost houses and flats. Another 3,478 units are single-storey terraced houses. The total of these saleable products constitutes 22% of the total incoming supply,” Tan says.

He adds that the more alarming figure is the serviced apartments/apartments segment which, at 47,215 units,  comprises 45.9% of the total incoming supply.

The Johor state government has frozen approvals new developments of such properties.

Tan says Iskandar Malaysia was never intended to be a property hub.

“The property sector has never been part of the catalytic thrust of Iskandar Malaysia. It is a by-product of the success of Iskandar Malaysia.

“However, this success has resulted in excess supply of serviced apartments and the government in cognisance of this has taken mitigating steps to prevent a bubble. There will be some adjustments ahead but this should be seen in positive light,” says Tan.