Despite its commercial success, Iskandar Malaysia faces various challenges such as the lack of affordable homes and the availability of options that allow private developers to pay fines and surrender land rather than build social housing when it comes to housing policy and development.
This is on top of the tensions between “bumiputra versus non-bumiputra” and “federal government versus state government”, according to a recently released study by ISEAS – Yusof Ishak Institute.
The study shows that Johor has the second largest stock of residential units in Malaysia with a total of 1,017,298 units, trailing just behind Selangor for 2016.
In addition, Johor’s stock in serviced apartments at 116,106 units will closely resemble that of Kuala Lumpur at 116,356 units.
“Like most of the highly urbanised cities within Asia, Kuala Lumpur suffers from land scarcity, so it is only sensible for a proliferation of high-rise buildings such as serviced apartments to take place. The same cannot be said for land-abundant Johor,” the study cites.
With an incoming supply of 164,848 and 38,400 units of residential and serviced apartments, this “will in turn jack up housing prices if the supply remains constant.”
Lack of affordable homes
Citing data by NAPIC (The National Property and Information Centre), the study shows that terrace houses are by far the most popular residential types in Johor as of the third quarter of 2016.
Johor Bahru has the most active market in the entire state with a total of 1,706 transactions for such homes in the said period.
This is followed by low-cost houses and low-cost flats.
Additionally, the study, citing data from NAPIC, shows that new home launches between 2008 to 2013 within the RM250,001 to RM500,000 range saw the most number of launches with a total of 21,906 launched within the period.
“Contributing about 40 % of total houses launched, this price range serves as a yardstick for home affordability of the majority of people,” the study cites.
Meanwhile, homes priced between RM100,000 to RM150,000 and RM150,001 and RM200,000 has greatly declined.
The former saw 1,522 (2008), 1,621 (2009), 320 (2010), 1,485 (2011), 84 (2012) and 0 (2013) units launched while the latter witnessed 1,120 (2008), 1,130 (2009), 1,071 (2010), 1,081 (2011), 810 (2012) and 528 (2013) units launched.
This brings their total number of launches to 5,032 and 5,740 units respectively.
On the other end of the spectrum, homes in the RM500,001 to RM1 million price range has increased significantly since 2010.
For example, there were 496 (2008), 697 (2009), 693 (2010), 2,653 (2011), 5,078 (2012) and 2,186 units (2013) bringing their total number to 11,803 units.
The study, citing data from Khazanah Research Institute, also showed that Johor has a median multiple affordability score of 4.2 and ranks amongst the “seriously unaffordable” category.
“With about 40 % of house launches priced from RM250,001 to RM500,000 in Johor Bahru, private housing in southern Johor has certainly exceeded the state’s housing affordability cut-off point (i.e., median housing price) of RM260,000,” the study cites.