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Tip 1:
Invest in shop lots
The supply for shop lot units in Johor is limited compared to
residential properties. According to the Malaysian Ministry of Finance
Valuation and Property Services Department (NAPIC), there are new
supplies of 6,048 and 3,601 commercial units in the first and second
quarter of 2013 as well as 1,604 and 2,589 completed units in the first
and second quarter, respectively. In terms of demand, shop offices are
the most in demand among Malaysians, according to iProperty.com's Asia
Property Market Sentiment Survey (H2) 2013, at 16% compared to other
commercial properties.
In comparison, the residential sector is looking at a bumper supply of
964,918 units (697,753 - existing stock, 113,583 - incoming supply,
153,582 - planned supply) in the second quarter of 2013. This means that
it will be challenging to rent out your property or to sell it in the
resale market as this total supply is more than Kuala Lumpur's 496, 238
units (425,199, existing stock, 48,543 - incoming supply, 22,496-
planned supply). However, do bear in mind that from 2015 onwards, the
Government Service Tax (GST) applies for properties with commercial
titles.
Tip 2: Invest in Medini
There are other incentives that you can apply for if you are looking to
live, work and play in Iskandar Malaysia. Called the 'Medini Incentive
Support Package', foreign knowledge workers are exempted from
RPGT when
they dispose their land and properties in Medini until 2015 and 2020
respectively.
To qualify for the above scheme, you must have a Bachelor's or Master's
degree with at least 10 years of professional work experience in a
qualifying activity or have a PhD with at least five years of
professional work experience in a qualifying activity. Medini is now the
latest foreign investors' darling as this is the only place in Malaysia
where foreigners can still purchase properties below RM1 million in
2014, subject to the Ministry of Finance's approval.
Designated at a free trade zone, the federal government has lifted
restrictions for foreigners here to ensure Medini will be a buzzing
district once the Rapid Transit System (RTS) network connects to the MRT
line by 2018. The RTS station will be located just next to LEGOLAND
Malaysia. Medini is also a prime area where Khazanah Nasional and
Temasek Holdings are involved in two joint-venture projects - Afiniti
Medini and Avira Wellness Centre.
Tip 3: Take advantage of the 15% tax rate scheme for knowledge
workers in Iskandar Malaysia
If you intend to work long-term in Iskandar Malaysia, then take
advantage of this additional incentive. First announced by Prime
Minister Najib Razak during Budget 2010, this scheme is aimed at foreign
knowledge workers and returning Malaysians to live, work and play in
Iskandar Malaysia so as to spur the growth of this special economic
zone. This scheme will allow you to enjoy a preferential flat rate of
15% tax on your employment income.
In order to apply for this scheme, you must be working in the nine
promoted sectors that IRDA has outlined. They include tourism, financial
advisory & consulting, education, healthcare, creative industries,
electrical & electronics, logistics, petrochemical & oleochemical and
food & agro processing. You can apply via your employer.
Tip 4: Go for landed terrace homes for capital gains
With Iskandar Malaysia poised to be the next top investment destination,
landed terraced homes will be popular. In fact, they are the most in
demand type of property among Malaysians. According to iProperty.com's
Asia Property Market Sentiment Survey (H2) 2013, 72% of Malaysians
prefer buying terraced homes. In addition, a majority of them (35%) have
a budget of between RM350,000 to RM500,000.
The challenge from next year onwards is to find the sweet spots that are
still within the budget of Malaysians since foreigners can only purchase
properties above RM1 million. iProperty.com's Asia Property Market
Sentiment Survey (H2) 2013 revealed that those with a budget above RM1
million is only 4%. However, the survey is spread across Malaysia and
does not reflect the ground reality in Iskandar Malaysia. In fact,
terraced homes at Horizon Hills that was launched in 2008 at around
RM288,000, are now commanding between RM860,000 to RM1.6 million in the
resale market. The resale market in Horizon Hills is very active with
most of the buyers comprising locals. There is good room for capital
appreciation for landed terraced homes in Iskandar Malaysia with the
long-term investment benefits.
Tip 5: Condominiums are usually for rental returns
Malaysians perceive condominiums as a source of rental returns as
opposed to capital gains. Using Ujana as a benchmark, a three-bedroom
unit there is currently transacting for RM4,000 in rent per month. With
the average three-bedroom unit valued at around RM800,000, this
translates to a rental return of 6%. The majority of the tenants in
Ujana are expatriates teaching at EduCity.
However, the condominium market in Iskandar Malaysia will be
challenging. According to the NAPIC, the state of Johor is looking at a
supply of 964,918 residential units (697,753 - existing stock, 113,583 -
incoming supply, 153,582 - planned supply) in the second quarter of
2013. This means it will be challenging to rent out your units.
Tip 6: Invest long-term
According to iProperty.com's Asia Property Market Sentiment Survey (H2)
2013, Iskandar Malaysia is perceived by respondents in Malaysia as the
next top investment destination, outside Selangor. This is followed by
Georgetown, Penang and Nusajaya, Johor. This means, there is good
potential for capital appreciation of your property, since this marks a
significant shift in interest among Malaysians from Penang in its
previous survey. In addition, by investing long-term, you do not have to
pay the hefty RPGT rate that will kick in by 2014.
Tip 7: Look for bulk purchase deals
Bulk purchase deals enable you to enjoy significant cost savings as
opposed to buying as an individual.
Tip 8: Buy properties nearing completion
For those of you who are not familiar with Iskandar Malaysia and want
some peace of mind, you may want to buy properties that are nearing
completion. This will at least help alleviate concerns you may have in
regards to developers who do not have a strong track record but have the
financial means to complete a project. However, do bear in mind that
properties nearing completion will cost significantly higher that the
initial launch price as the construction costs have been factored into
it.
Tip 9: Invest in Johor Bahru Sentral
A rejuvenated and greener Johor Bahru looks set to rise by 2018 that
will coincide with the opening of the Tanjung Puteri MRT station that
will connect to Singapore's Thomson Line via Woodland North MRT station.
The federal government has so far set aside RM1.8 billion for Johor
Bahru's rejuvenation that will include the opening of Sungei Segget
(where Jalan Wong Ah Fook is located) in 2015, an increase in the number
of police posts and CCTVs, the opening of Angry Birds Theme Park in 2014
next to Menara Komtar as well as Hilton Hotel and high-end residences (Suasana)
during the same period. A new Central Business District zone after
Menara Komtar is also in the pipeline, as outlined in IRDA's new
masterplan and zoning in the area that will include park connectors. The
new Johor Bahru is modeled after tourism attractions in Venice and
Amsterdam which the authorities hope will bring the river back to life
once Sungei Segget's rehabilitation project is completed.
Tip 10: Invest in Danga Bay
Danga Bay is undergoing massive transformation and will be a bustling
metropolis come 2025 once the large-scale township development by
CapitaLand Malaysia is ready. This joint-venture project by CapitaLand,
Temasek Holdings and Iskandar Waterfront Sdn Bhd is CapitaLand's largest
investment by far in Malaysia valued at RM811 million. To be developed
in phases over the next 10 to12 years, Danga Bay will soon be home to a
premier waterfront residential community comprising high rise and landed
properties together with marinas, shopping malls, F&B outlets and
restaurants, serviced residences, offices and recreational facilities.
Sources: www.iproperty.com.my
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