Rental demand for Johor homes surges amid soaring Singapore rents; Q1 sales volume beats pre-pandemic levels


imageIncreasing demand has pushed home rentals in Johor Bahru higher, with some even rising more than 50 per cent from 2021 levels. PHOTO: TAN AI LENG, BT

[KUALA LUMPUR] With rentals soaring in Singapore, more Malaysians working in the Republic are opting to move across the Causeway to Johor Bahru (JB), where there are much cheaper accommodation options.

Jessie Chin and her fiance, who are currently renting a room in a Yishun flat for S$1,200 a month, have decided to head to JB when their tenancy agreement ends. They will move to a fully-furnished, two-bedroom apartment with a built-up area of 850 square feet (sq ft), about 20 kilometres away from Woodlands Checkpoint in Singapore. The rented property will cost them just RM1,700 (S$498) a month.

Even though they face the prospect of spending up to two hours in traffic and going through immigration, in commuting to and from their respective workplaces in Singapore, the couple said the extra effort will be worth the significant cost savings.

“My younger sister will soon start work in Singapore too, and it’s too expensive for the three of us to rent in Singapore,” said Chin, 29, who works as an operations staff in the food and beverage industry. “We will try to stay in Johor and commute daily for a year (and see how things go),” she told The Business Times (BT).

Property consultants said there has been growing interest in and demand for rental properties in Malaysia since the country reopened its borders in April 2022, and this has driven rents upward.

Samuel Tan, the executive director of KGV International Property Consultants in Johor, said it is not just Malaysians working in Singapore who are driving up demand.

Expatriates, students and their family members are also on the hunt for rental homes in Johor, he said. Short-stay operators are also looking for rental units to refurbish into holiday homes, which are becoming popular with tourists from Singapore and elsewhere.

There is high demand especially for homes in Iskandar Puteri as well as areas near the Tuas Second Link and Causeway. Rents in these areas have mostly returned to pre-pandemic levels, Tan said.

Usha Lachumanan, a real estate negotiator with Gather Properties in JB, said there are many enquiries for rental homes in popular locations in JB – particularly those within a 30-minute drive to the city centre, such as Taman Century, Danga Bay, Skudai, Mount Austin and Masai.

The monthly rent for a 600 sq ft studio in Teega Residences in Puteri Harbour was around RM1,000 in 2021, but this has gone up by 50 per cent to RM1,500 now.

An 800 sq ft apartment in Afiniti Residences in Bandar Medini Iskandar was recently leased for RM2,000 a month, a nearly 67 per cent jump from RM1,200 earlier during the pandemic when borders were still shut.

And in Danga Bay, a fully-furnished two-bedroom apartment has a minimum rent of RM1,700. In 2021, the range was RM1,000 to RM1,300 for a similar unit.

Even so, consultants said rental demand and prices in the state will continue to trend upwards over the next three years.

Jonathan Lo, a director at CBRE | WTW, said the new JB-Singapore Rapid Transit System (RTS) Link, which is slated to start operations in early 2027, will act as another catalyst to spur demand for rental homes in Johor.

The 4-km link can ferry up to 10,000 commuters in both directions per hour, and will be an attractive transport option for Malaysians who want to work in Singapore but live in JB.

“Other than renting, we have noticed that properties with proximity to major roads or public transport connections to Singapore have been attracting foreign buyers’ interest,” Lo told BT, adding that the majority of these buyers are doing so for the investment potential.

Data from Malaysia’s National Property Information Centre indicated that a total of 28,087 units worth RM10.9 billion were sold in Johor last year.

In the first quarter of 2023, a total of 7,497 residential properties worth RM3.2 billion changed hands. The transaction volume is 2.6 per cent lower than in the fourth quarter of last year, but 11.8 per cent higher than in the first three months of 2020, just before the pandemic struck.

Rental yields for residential properties in JB have remained stable, said Lo. For landed homes, the average yield was between 2.5 per cent and 3.5 per cent. For high-rise residential properties, the yield ranged between 3.5 per cent and 4.5 per cent.

The Singapore government’s move to raise the Additional Buyer’s Stamp Duty for foreigners buying property in Singapore will also shift investors’ attention to other cities in South-east Asia, said Tan from KGV International.

Source of The Business Times


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