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Analysts said home prices have increased in recent years, with properties around the Bukit Chagar RTS station – the Malaysia terminus – seeing the highest demand.
View of the Johor-Singapore Causeway with Johor Bahru landmarks such as City Square shopping mall in the background. (File photo: iStock)
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13 Jan 2024 11:25AM (Updated: 13 Jan 2024 11:53AM)
JOHOR BAHRU: Some Singaporeans are snapping up properties near the Rapid Transit System (RTS) Link in Johor Bahru in anticipation of easier access across the border once the project is completed.
Analysts said home prices have increased in recent years, with properties around the Bukit Chagar RTS station – the Malaysia terminus – seeing the highest demand.
“The RTS is a big draw factor,” said real estate agent Ryan Khoo, who deals with properties in Johor. “It will make the travel between Singapore and Johor Bahru a lot shorter.”
The service will ease the notorious bottlenecks along the Causeway – one of the world’s busiest border crossings – by transporting up to 10,000 passengers each way every hour.
View of a portion of the Rapid Transit System (RTS) Link between Johor Bahru and Singapore on Jan 11, 2024. (Photo: CNA/Jeremy Long) “The RTS will be a game changer,” said Dr Timothy Wong, a senior lecturer at the National University Singapore’s (NUS) Department of Economics.
“It is part of the greater plan to integrate the economies of these two cities more closely. The RTS plays quite nicely into the Johor-Singapore special economic zone (SEZ) because it eases the movement of people across the border.”
RTS ATTRACTS HOME BUYERS The light rail transport is one of the main draws that persuaded one such Singaporean to buy properties across the Causeway.
Freelance lecturer Daniel Ong recently purchased two units from a development project located near Bukit Chagar station, citing additional factors like amenities and lower prices.
“It is easily accessible by public transport, what more with the RTS coming up,” he told CNA.
“My wife and I quite enjoy the food and doing some shopping over there. We also find that the cost of living is definitely much lower than in Singapore.”
The 66-year-old plans to rent out one of the units and use the other as a retirement or vacation home.
Older properties in the same area have also seen renewed interest from buyers, despite competition from new condominiums, said observers.
PRICES ON UPWARD TREND Industry players said increased demand has pushed prices of properties within walking distance of the terminus up by about 18 per cent in the last two years. A two-bedroom condominium now costs about S$240,000 (US$180,000).
“This increase is expected to continue as the RTS progressively gets completed,” said Dr Lee Nai Jia, head of real estate intelligence and digital and software solutions at the PropertyGuru Group.
“When it’s fully operational, I think we will see another increase of maybe about 5 to 6 per cent. Prices are then likely to stabilise from there.”
Integrated developments with offices and retail spaces are also expected to be built in the area in the future.
DOUBLED RENTAL PRICES Rental prices have gone up as well. Apartments near the border are now commanding almost twice the rental compared to the pandemic period, when the Movement Control Order (MCO) prevented travel and caused rates to fall.
“(Each) studio unit previously was asking about RM1,000 (S$290) to RM1,200 per month during the MCO. Now the monthly rental is ranging from RM2,000 to RM2,300,” said Mr Keith Ooi, group managing director of real estate agency Knight Frank Malaysia.
The potential of earning a rental income led Singapore buyer James Lim to purchase a two-bedder condominium at a freehold mega project last month.
“When the RTS opens in two years’ time, this property price will definitely go up. The rental price will also definitely be quite attractive as compared to other places,” said the 55-year-old, who also owns properties in other Malaysian cities including Genting and Kuala Lumpur.
Industry players said a majority of tenants are Malaysians working in Singapore who are willing to commute daily across the border in exchange for the lower rental prices. Other sizeable groups of renters are Singaporeans and Chinese nationals.
Prime Minister of Singapore Lee Hsien Loong Prime Minister of Malaysia Anwar Ibrahim and their delegates pose for a photograph during a ceremony to commemorate the completion of the connecting span for the construction of the Johor Bahru – Singapore Rapid Transit System (RTS) link project which connects the marine viaduct between Malaysia and Singapore at the Straits of Johor, Malaysia-Singapore border January 11, 2024. Afiq Hambali /Malaysia’s Prime Minister Office/Handout via REUTERS WHY SINGAPOREANS CHOOSE JB Real estate agents said there has been a surge in demand for Johor properties from Singapore buyers since early 2023.
Most home seekers are above 40 years old and are planning their retirement options, they said. Aside from the stronger Singapore dollar and the draw of reducing their cost of living expenses, they also cited the proximity to the country as a huge appeal.
“The good thing about retiring in JB is that you (are so close to) Singapore … you’re still connected to your Singapore friends and family. Plus the RTS will make the travel a lot shorter,” said Mr Khoo.
Others purchased Johor properties as holiday homes or for investment purposes.
“Some Singaporeans are opting for an alternative destination with a lower or more competitive pricing. I see JB as a complement to the Singapore housing market – an alternative destination for buyers and investors,” said Mr Ooi.
He added that the overall outlook for Johor’s property market remains positive, with demand expected to continue on an uptrend.
RTS AND SEZ Dr Wong said that while the heightened demand spells good news for property developers, this could also cause living expenses to be pushed up in Johor Bahru.
“There is going to be greater segmenting of income within JB because the city centre is going to become a wealthier district. That will send people who have lower incomes to the periphery,” he told CNA’s Singapore Tonight.
With the SEZ in the works, however, Dr Wong said the initiative would be beneficial for businesses in both cities.
“From a business perspective, there are synergies that Singaporeans and Malaysians can make that can take place in JB … that would enrich both cities. For example, export-driven sectors such as manufacturing can gain from (the SEZ),” he said, giving an example of Singapore companies setting up in Johor, where land, material and labour costs are lower, and where commuting will soon be easier.
On the Singapore side of the border, real estate analysts said they foresee an uptick in demand for homes near Woodlands North as the RTS nears completion, and expect new residential units to be added to the neighbourhood in the future.
The governments of the two nations celebrated a construction milestone in the RTS project on Thursday, with about 65 per cent of structural works completed on both sides.
The RTS Link is expected to start passenger service by December 2026.