Owning a piece of real estate seems to be an obsession for many Asians.
Perhaps this is because owning a property can satisfy 3 needs – the need for having shelter, the need for satisfaction and achievements, and the need for investing.
As property prices in Singapore become more and more out of reach, many Singaporeans and PRs, whether working or semi-retired, have slowly turned their gaze across the causeway.
The proximity between Singapore and Malaysia has allowed the flow of goods, services, and customers ever since the SGD unpegged from the MYR and drifted higher. It became more and more of a no-brainer for Singaporeans to spend in Malaysia as the exchange rate continued to rise over the years.
From groceries to haircuts, and then petrol and other expenses, Johor Bahru (JB) slowly became a weekly routine for families on a tight or frugal budget.
On top of a relatively high median and mean income, some Singaporeans and PRs would have considered investing in a property in JB. The minimum price of a Malaysian property purchased by a foreigner is MYR 1 million.
This sum might be hefty for most Malaysians but should be relatively affordable for a median-income-earning Singaporean.
So with the Rapid Transit System (RTS) expected to be fully operational by January 2027, does this provide an opportunity to revisit property investing near Malaysia’s RTS station?
Knowing more about Malaysia’s RTS station
Malaysia’s RTS station will be Bukit Chagar. Although it might sound unfamiliar, it is the area encompassing the surrounding of CIQ.
Both stations in Bukit Chagar and on the Singapore side – Woodlands North Station, will have separate and co-located customs. Passengers obtain custom clearances for departure and arrivals before boarding the train.
With JBCC Komtar, City Square Mall, and Zenith Mall also situated in the vicinity, Bukit Chagar ticks all the 3 requirements of a good property investment.
Location, location, and location.
Prices of properties around Bukit Chagar area
The RTS is not a new story. It was first envisioned and suggested by then-Singapore minister Mah Bow Tan in 1991. The Woodlands Extension back then was designed to accommodate such a possibility in the future.
After plenty of drama, and delays, the project resumed with no further setbacks and is slated to start operating in 2027.
Needless to say, there might already be people who bought properties around the JB CIQ area with mixed fortunes over the years. Even though the RTS faced several delays, the number of Malaysians pouring over to earn a living in Singapore has certainly propped up the economic activities and property prices.
A random check on properties available for sale around Bukit Chagar area reveal prices of around MYR 1 million for a build-up of 1,000-1,200 sqf on average. This price tag is not necessarily affordable for Malaysians. Prices can easily be more pricey if compared to other areas in the Klang Valley.
In short, prices are already at a premium even before the RTS is commissioned.
Opportunity or Risk?
I’d be frank – the opportunity is there. If we were to assume whatever happened for the past 20 years continues – Malaysians continue in droves to seek a livelihood in Singapore, the continuous strengthening of the Singapore Dollar against the Malaysian Ringgit, on top of a faster commute between Singapore and Johor, more and more people would consider living in Johor and do the daily commute so long if it does not put a toll on health and sleep.
On the flip side, the abundance of land around the JB area, on top of multiple connections between Johor and Singapore (there is still a Tuas second link remember!) means that not only both areas could benefit from human traffic and settlement, but could also give rise to newer projects.
Can the existing properties keep up with newer properties, preserving or enhancing their value for the next 20 years? And can even the potential appreciation value of the property, keep up with the Sing Dollar’s appreciation against the Ringgit?
The risk and ambiguity could be stronger than the face value
Not all potential deals will be bad deals. But the number of good property deals will certainly dwarf the mediocre deals.
Just like stock picking, picking the right property that eventually turns out to be a good investment is easier said than done. The same property, facing different directions and different floors has each of its intrinsic value.
On top of that, even though MYR 1 million could be easy peasy for anyone earning the Singapore Dollar, what we earn is still hard-earned money.
Those who have done their homework would exercise caution and make their decision soundly.
But if you are someone who has just thought of jumping onto this 20-year-old bandwagon, do ensure all due diligence is done before buying a property just for the obvious reason.