Malaysia property investment hotspot: Zone A of Iskandar.

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There are 5 zones in Iskandar, but currently we should keep our focus on zones A and B of Iskandar.

Zones C, D and E are where the ports, airport and industrial activities are located. Compared to Singapore, these are like our Jurong Port and Industrial Estates, our Changi Airport and Changi Business and Tech Park.

Today we’ll take a look at Zone A, Johor Bahru City Centre (JBCC), also known as “the old JB town”.

Zone A or JBCC is where the current central business district and shopping belt of Iskandar are located. Compared to Singapore, they are like our Orchard Road shopping belt and Central Business Districts.

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If you like something near to Singapore, and has good capital appreciation potential, go for Iskandar (Johor Bahru). Generally, compared to Zone B, properties in Zone A will have better chance of getting tenants currently, as this is a more matured region, and there are more businesses already in operation.

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 Another major advantage of Zone A is that the train line connecting Singapore to JB will have it’s end terminal here. Called the Rapid Transit System (RTS), when it is ready by 2018, passengers will be able to take the MRT from the new Woodlands North MRT Station (part of the new Thomson Line) to JBCC.

The next question is, where is the train station be located in JBCC? The short answer is that it is not finalised yet. These are the 4 locations under consideration:

Each of these 4 choices, is located next to the JB customs.

For Singapore, the connecting train station will be the new Woodlands North MRT station. It’s already searchable on streetdirectory.com/ Singapore Land Transport Authority (LTA) website.

One of the key attraction of investing in Iskandar is it’s proximity to Singapore and the huge price difference between these 2 regions. In CNBC’s latest research, Singapore is number 6 in the world in terms of highest property prices, and number 2 in Asia just behind Hong Kong.

Singapore 27,800 per sq. m.

Average price change in 2012: +0.6%

“However with significant immigration, the world’s densest population of millionaires, and limited land for development (the country is only 700 sq. km in size), property prices are not expected to plummet anytime soon.”

The psf stated in the report is the average prices for Singapore’s high end residential properties.

In the Woodlands area, a check on srx.com.sg tells us the average prices of condominiums here are about S$750psf. The average prices of resale HDB flats (Singapore’s public housing) is about S$400psf.

If you go for a luxury condominium in JBCC that’s near the JB customs, the price is around S$450 to S$550 psf. One such development is The Astaka. Once completed, it’ll be the tallest residential development in Malaysia and Singapore.

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Built on elevated ground, even lower floor units of the astaka from the 7th floor onwards will have sea view. It’s good for people who like space, as there are only 3 and 4 bedrooms in Astaka development and their average sizes are 2300 to 2700sf. And the price? About S$900+k to 1m.

I’m sure you can see the possibilities here:

1. People staying in Singapore can rent out their houses and stay in JBCC. The rent they get for their Singapore houses can most probably help finance a nicer place in JB.

2. Commuting to and fro Singapore and JB will be like taking the MRT from one station to the next, once the RTS is ready in 2018. Even clearing the customs will be faster, since plans are under way to streamline clearance and commuters will only need to clear it once on the side they are exiting from. This really reminds me of Shenzhen – hongkong relationship.

3. S$1 can go a longer way in JB. About 2 to 2.5 times. According to data from expatistan.com, the cost of living in Singapore is on average 176% more expansive than that of JB. For the housing category, Singapore is 355% more expansive than JB.

4. More Malaysians from other parts of Malaysia will find JB a better place to find work and opportunities, as the Iskandar master plan takes shape and more and more businesses are located here. The residential areas that will experience the highest increase in demand will be the areas nearest to the Malaysia-Singapore customs. Simple rule of economics, increase in demand will bring about increase in prices.

With the improvement in connectivity between Singapore and Malaysia, and also warmer and warmer bilateral ties between the leaders of these 2 neighbours, investing in Malaysia has become increasingly important as part of your property investment portfolio.

Tallest luxurious 312M residential of SEA.
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