Concerns piling up over Iskandar housing glut

New figures show number of homes in Johor state to rise by over 335,000

Concerns over a housing glut in Iskandar have been aggravated by new figures from the Malaysian government.

It said the total number of homes in Johor state will surge by more than 335,000, or 46.7 per cent, over the next few years - with most almost certainly in the Iskandar development zone.

The finding will only add to concerns of an oversupply in the state, which is favoured by some Singaporeans looking for a second home.

The National Property Information Centre (Napic) also indicated in its 2014 annual report released on Monday that there will be a sharp increase in shop and industrial units in Johor in the coming years.

Napic said there were 719,421 residential units in Johor as of the end of last year. It noted that "incoming supply" - units being built - would total 142,567 units once completed over the next few years.

And then there are another 193,271 units under "planned supply" - or units that have been approved in Johor but the construction of which had not yet begun.

Those two figures - of incoming and planned supply - add up to 335,838 units, which represent a 46.7 per cent surge over the numbers as of the end of last year.

This is a huge jump when compared with the whole of Malaysia: Napic said that for the whole country, the existing stock of 4.83 million residential units will increase by 29 per cent.

It did not indicate the completion dates of the new units.

The report also revealed figures on commercial, industrial, and other land-use types in other Malaysian states and in the Kuala Lumpur federal territory.

Napic is a unit under the Valuation and Property Services Department, itself a department under Malaysia's Ministry of Finance.

Its website gave only the figures for the whole of Johor, with no separate data on residential units being built in the Iskandar zone in southern Johor.

But with most of the housing projects launched in Johor focused on Iskandar - including those by major China developers - it is safe to deduce that most of the new units will be built in southern Johor.

Maybank warned in a report last week of mounting risks to Iskandar's already-weak property market. It said the "aggressive land-banking activities" of Chinese developers in the "already crowded" Malaysian development zone could make matters worse.

"Without coordinated planning and control, (Chinese developers' land banking) could aggravate the oversupply situation and induce price wars, especially in the high-rise mixed-development segment," wrote Maybank analyst Wong Wei Sum in the report.

And there is more to worry about: Napic said that at the end of last year, of the 13,690 housing units launched in Johor, 26 per cent, or 3,572 units, remained unsold.

The report also indicated a surge in the number of shop units coming up in Johor over the next few years.

It said the shop units being built totalled 15,329, while another 18,078 have been approved for construction. They will add 46.6 per cent to the 71,718 existing shop units in Johor as of the end of last year.

As for industrial units, the existing stock of 14,159 units will jump by 40 per cent, as 1,935 units are being built and another 3,788 have been approved.

reme@sph.com.sg