Property glut sparks blame game

THE most talked about subject in Johor over the past year must surely be the "property market". This was the talking point at most coffee shops, around dinner tables or at the pantry counters at corporate offices in Johor Baru.

It is rather awkward for Johoreans to be drawn into this "property talk" because only not too long ago we used to mock our cousins across the Causeway for their near obsession with dwelling places and abodes.

Every time you meet a Singaporean, the conversation inevitably would switch to how the islanders are desperately yearning to "upgrade" from the republic's Housing Development Board (HDB) flats to condominium living.

Visiting our homes in Johor, they would turn green with envy as they scan the sheer space of our houses and the supposedly "incredibly cheap" prices we paid to own these landed properties.

Of course, with so much land at our disposal here, we never really fancied high-rise condominium living with all the so-called luxury amenities that come with it.

But the trend is somewhat changing now due in part to the irresistible influence from Singapore ... what with the daily bombardment of Singapore TV advertising of new condo launches.

Hence, it comes as no surprise that the quest for high-end apartment living in Johor Baru is now often the topic of conversation at private gatherings.

While condo developments are not new in Johor Baru, the appeal was never really evident before. This was best manifested by the many vacant and some abandoned condo projects strewn all across the state capital a few years ago.

Only now do we see a revival of sorts in the condo market.

The turning point must surely be the entry of big-time China developers early this year, who have suddenly made high-rise condo living so much more appealing with their spectacular developments.

The size and scope of their projects, accentuated by lavish design and landscaping, were simply too hard to resist ... not to mention their big-budget marketing and advertising campaigns and generous freebies to lure buyers.

The JB property sector, as we knew it before, has seen an unprecedented transformation within a relatively short time.

The style, grandeur, sophistication and speed of these foreign companies has literally shaken the local market ... to the extent that local developers are now in a daze and still not sure what had hit them.

Such has been the dramatic transformation of the property landscape in Johor Baru over these past 12 months ... truly spectacular and incredible!

But now comes the headache.

According to Mentri Besar Datuk Seri Mohamed Khaled Nordin, too many condos are now chasing too few buyers. Consequently, the state government has decided to put a freeze on new approvals.

It seems some 86,000 units of up-market apartments have been approved for construction, although Johor only needs about 26,000 units to satisfy demand.

This mismatch in supply and demand would not have come about if the state government, through its local authorities, had monitored the situation in the first place.

Local councils like the Johor Baru City Council (MBJB) and Johor Baru Central Municipal Council (MBJBT) are only too happy to grant approvals to developers because it means revenue for them.

Indeed, it is no secret that the MBJBT, in particular, is among the richest local authorities in the country with endless approvals for not only condo developments, but all manner of property projects.

This revenue, of course, goes direct into the state's coffers, which explains why the mentri besar, when tabling the 2015 State Budget, proudly boasted that Johor has now amassed reserves totalling RM2.764 billion since December 2013.

Even a cursory review of the state's accounts will show that a sizeable portion of the RM420.22 million revenue in 2014 alone, actually came from property development.

This is a sector heavily regulated by the state and federal governments, with a thousand-and-one fees, dues and charges levied on developers at every stage of the tedious and protracted project approval process.

But the bottom line is that the government makes good money from this industry, which is why the local authorities saw no reason to check, monitor, stagger or even regulate the number of condo units coming into the market.

Like a conveyor belt endlessly churning out goods in a factory, they kept giving their stamp of approval for serviced apartments and condos, with no fear of the consequences of a glut.

Only now have they come to their senses. But instead of taking responsibility for this sorry state of affairs, they are putting the blame on the so-called "greedy" developers.

Roy, a long-time resident of JB, is a keen watcher of economic, political and social trends on both sides of the Johor Straits. Comments: letters@thesundaily.com