KINIBIZ Iskandar Malaysia, the Special Economic Zone (SEZ) in Johor, has seldom been out of the news since its inception in 2006. The massive 20-year project is spread across a sprawling 550,000 acres and divided into five flagship zones. It is designed to rejuvenate Johor Baru (JB) and position it as a major regional economic hub with between RM20 billion to RM22 billion in investments targeted yearly until 2025.

Arguably, property development has fuelled the spectacular growth of Iskandar in recent years, with local and international developers flocking to the area and units being snapped up by eager property hunters.

Bookings fall 20-30pct

Nevertheless, with market sentiment decidedly mixed on the property market for 2014, is this upward trend about to come to a halt? Some recent property launches in Iskandar with lukewarm uptakes seem to suggest that the euphoric demand for all things Iskandar have cooled to a certain degree.

This can be attributed to factors such as the measures announced in last October’s Budget 2014 to clamp down on speculation such as the increase in Real Property Gains Tax (RPGT), the increase of minimum property purchases of foreigners from RM500,000 to RM1 million and a property levy of 2 percent for foreign purchases in Johor.

“Based on market sources, there was an estimated 20 percent to 30 percent drop-off in purchase bookings with the developers since the measures were announced,” said Tan Ka Leong, director of CH Williams Talhar & Wong (WTW). Tan added that the situation should improve within six months to a year after the market has had time to digest these policy changes.

Even if the market eventually recovers, such a sharp fall in potential sales is a definite cause for concern. Would local buyers be able to step into the breach and offset any tapering off of foreign demand, considering that the local economy is only starting to grapple with the potential long-term implications of the various price hikes announced recently?

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