S'poreans take wait-and-see approach to Johor property

Despite the delayed implementation of the RM1 million (S$387,000) minimum property price threshold for foreigners in Johor, Singaporean buyers are unlikely to rush in, according to Khalil Adis, Founder of Khalil Adis Consultancy.

He noted that Singaporeans are used to the orderly and uniform implementation of policies in their home country.

"Without a similar framework in Malaysia and (given) the sudden implementation in federal controlled territories, I suspect they would rather wait out until the policy has been cast in stone.

"Singaporeans do not want to be caught in between where they suddenly find themselves unable to secure loans should they purchase properties below RM1 million. In Iskandar, for instance, only OCBC is willing to finance loans for properties less than RM1 million," said Adis.

Moreover, buying interest in Iskandar among Singaporeans has cooled in recent months, despite the Singapore dollar racing to a 16-year high against the ringgit last month and the existence of special economic zones such as Medini, where foreigners can purchase properties below RM1 million with no real property gains tax (RPGT) up to 2020.

"I think this is due to the lack of clarity that arose from Malaysia's Budget 2014. As far as we understand, the federal government decides what the measures will be (i.e. raising minimum purchase price) but the state has the prerogative to decide when to implement. This is what is causing the wait-and-see situation.

"Singaporeans now mainly want to understand the market, wait for the policies to be implemented and do lots of research until they are ready to go back to the market," Adis added.

Last Saturday, the RM1 million minimum threshold for foreigners took effect in all federal administered territories – Kuala Lumpur, Putrajaya and Labuan. But for Johor, the policy takes effect in May.

Previously, Penang was the only Malaysian state whereby foreigners were subject to the RM1 million price threshold for condominiums.

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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