While it has been reported that authorities in Johor had approved over 80,000 high-rise residential units, Johor will not witness an oversupply of such units.
This is because only 10 percent of the approved units are currently being constructed, said KGV International Property Consultants executive director Samuel Tan.
“The general feeling is that there will be too many. But not all are being built simultaneously,” said Tan.
Since 2013, high-rise residential projects have been the staple of property developers in Johor. In fact, China’s Country Garden Holdings Co Ltd launched 9,000 units in one go in Danga Bay that year.
Given the incoming supply of high-rise properties, the government of Johor issued a freeze on new applications to construct serviced apartments.
An industry watcher believed that the freeze should only be applied to certain locations and not “across the board”.
“There is still demand for high-rise developments, especially affordable ones.”
In concurring, Tan noted that certain established areas in Johor, such as Bukit Indah and Tebrau, still sees demand for affordable properties priced from RM300,000 to RM400,000.
“Those that can’t afford landed residential properties will look to affordable high-rise units. So the freeze by the state government should be selective, otherwise it would create pent-up demand,” he added.
Looking ahead, Tan said the perception of an oversupply of high-rise residential units within the state could lead to a slow down in transactions this year.
“Last year, transactions within this sub-segment did not slow down,” he said.
In its 2015 Property Market report, CH Williams Talhar & Wong (WTW) revealed that the existing supply of high-rise residences increased 2.51 percent in 2014 to 31,322 units from 2013.
“The average transaction values of condominiums in the sub-sale market increased from RM400 per sq ft in 2013 to RM450 per sq ft in 2014, up 12.5 percent,” it added.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
