The announcement of the many initiatives for Iskandar Malaysia has enthralled developers, which led to the current oversupply situation in Johor, Datuk Zamani Kasim, chief executive officer of Astaka Holdings Ltd.
However, he expects the market to correct itself in the long term, reported the New Straits Times.
“There is an oversupply of apartments and condominiums in Johor Baru because developers were ‘enthralled’ with Iskandar Malaysia when it was first announced, considering all the initiatives that they are taking like Educity and pushing the industrial sector in the region,” he said.
“The developers saw this as an opportunity for them to start early while the other initiatives were still in progress. They (the authorities) are projecting a population of three million by 2025 in Iskandar Malaysia with 1.7 million in Johor Baru alone. With this additional numbers, there will be a need for housing. So, I believe the market will correct itself in the long term, despite the current oversupply situation.”
Based on government statistics, affordable housing accounted for around 60 percent of Johor’s existing housing stock, and not properties priced at RM1 million and above, noted Zamani.
Astaka launched its maiden project, the 438-unit The Astaka @ One Bukit Senyum, with the Johor Baru project achieving 72 percent take-up rate.
With sizes ranging from 2,207 sq ft to 2,659 sq ft, each unit was priced at over RM2 million, said Zamani. “We are selling our units at RM1,350 per sq ft (psf) and have achieved RM800 million in sales.”
He noted that the main problem for affordable housing buyers was the qualification for bank loans.
“While that is a problem the authorities also have to look into issues such as Bumiputera quota and discount at 15 percent in Johor, which is the highest in the country. in other states, Bumiputera discount is between five and 10 percent.”
Meanwhile, Zamani expects the implementation of the sales and services tax (SST) to result in lower property prices.
“I believe (construction) cost will drop with the SST because of the exemption for building materials. Under the Goods and Services Tax regime, the cost for developers was higher,” he said.
“I think there will be a reduction in cost after SST and that would reflect on the selling price. It remains to be seen by how much.”
Image source: Malay Mail
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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