PropertyGuru Singapore country manager Dr Tan Tee Khoon said that as of April this year, demand for residential homes in Johor Bahru recorded an increase of "close to three times" since October 2019. The demand index for residential homes for rent in Johor Bahru also experienced a significant jump after the reopening of the Johor-Singapore border in February 2022, he said, and since then, rental demand has remained largely stable.Using asking prices for service residences as a proxy for price movement, the median psf was RM488.75 as of April 2024, up from RM397.35 in March 2022, he said, adding that this was also higher than the pre-COVID-19 median price of RM449.07 psf."Notably, nearly 44% of property seekers looking for a residential property in Johor Bahru in April 2024 were from Singapore," he said.That’s several reasons that contributed to this, which including:
Currency
The SGD to MYR exchange rate has declined by nearly 6% over the past six months. The peak rate this year was SGD 1 to MYR 3.56 in February, dropping to SGD 1 to MYR 3.2 in September, marking over a 10% decrease from the peak. Malaysia's ringgit has been among Asia's best-performing currencies this year, and according to MIDF Research, it is expected to perform even better in 2025.
Chinese: 令吉强势抬头或将回到疫情前水平 分析师：可考虑购买马国资产 | 联合早报
2. RTS LinkThe RTS Link, a train connecting Johor Bahru and Singapore is slated to start passenger service by the end of 2026. Once operational, it is expected to ease bottlenecks on the Causeway, the RTS Link will serve 10,000 passengers per hour and should ease traffic congestion on the Causeway.The consistent demand, not just from Singaporeans but investors worldwide too, has buoyed property prices in Johor, which have risen threefold since 2010, according to data from Malaysia's National Property Information Centre (NAPIC).SRI’s Lye said: “Once the RTS is open and people find it convenient to travel, more Singaporeans would be interested in exploring moving across the Causeway, especially if they can enjoy a better cost of living, I think JB will boom.”
3. Stable and good economy outlookStability should be the first thing you look at when you want to invest in real estate because it safeguards against market fluctuations and uncertainties. Malaysia is a country with a stable environment. The last Fragile State Index reported for this country is 53.1, which is very good.
As indicated by IMF projections, Malaysia is likely to finish 2024 with a growth rate of 4.4%, which is a robust number. If we take 2025, the consensus estimate is 4.4%.
In the long term, the growth will persist since Malaysia's economy is expected to increase by 19.4% during the next 5 years, resulting in an average GDP growth rate of 3.9%.
4. Increasing in demand The Malaysian population is growing (+10% in 5 years), also, Johor is set to catch AI gold rush with data centre boom: Microsoft announces US$2.2 billion investment to fuel Malaysia’s cloud and AI transformation - Microsoft Stories Asia YTL and Nvidia to build AI data centre in Johor - Developing Telecoms For 2024, property analyst Samuel Tan said that Johor is also on track to attract around RM17 billion in investments for data centres alone. He said this will mainly come from established technology companies that include YTL Group, Yondr Group, AirTrunk, MN Holdings, GDS Holdings, and Equinix.
Things to take note before buying a property in Malaysia
Buying a property in Malaysia looks promising, but that’s few things to take note of before buying.
A. Minimum purchase price for foreigners
Generally, foreigners buying properties in Malaysia must adhere to a minimum purchase price:
- Johor : RM 1 million for highrise / strata title property;
RM 2 million for for landed property in designated international zone
- Kuala Lumpur/Putra Jaya/Langkawi/Perak/Pahang/Kelantan : RM 1 million
- Selangor: RM 2 million limited to strata title property
RM 1 million is around SGD 302,000
However, there are exceptions and approved projects, like The Asteriaz @ Kebun Teh by Exsim, that don't adhere to this guideline. Foreigners can purchase units starting from RM 600,000 (around SGD 181,000), and over 50% of units were sold on launch day 01 November 2024.
B. Interest rate is higher than Singapore
Malaysian mortgage interest rates typically range from 3.95% to 4.5%, which is higher than Singapore's 2.7% to 3.2% range. However, due to lower property prices in Malaysia, monthly instalments can be more affordable. As an example, a RM 1 million Malaysian property with an 80% loan and a 4% interest rate would result in a monthly payment of approximately RM 3,819 (SGD 1,156).
If you got more questions about Malaysia property feel free to contact me :)
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