Johor Bahru is located in the southernmost region of Peninsular Malaysia, just across the border with Singapore. In fact, many people who work in Singapore live in Johor Baharu to take advantage of more affordable rents and cost of living. This includes many Singaporean citizens and residents. They commute every day across the Causeway or 2nd Link bridges.
Johor Bahru is not only the largest city in the state of Johor but also the second-largest metropolis in Malaysia, after Kuala Lumpur. It owes much of its economic and real estate development to its proximity to Singapore, the most prosperous country in all of Southeast Asia.
To make the most of such windfall, the Malaysian government launched the Iskandar project in 2006. The objective of this ambitious economic initiative is to create a "growth corridor" in the Johor region that would particularly benefit from the advantages of its location and its highly favorable economic ecosystem. The growth area identified by authorities covers an area that is more than six times the size of neighboring Singapore with more than 4,700 square kilometres. The development of Iskandar is focused on creating economic success in the region, and this is one of the reasons why this city is thriving and attracting more and more expatriates.
Thanks to such swift development, a multitude of accommodation options now exist in Johor Bahru, from luxury condominiums to townhouses in gated estates to different types of apartments, villas, or more or less affordable residences. The luxury condo market in particular has exploded in recent years, with far more supply than demand that the city can absorb.
The Covid-19 pandemic in Malaysia has not helped the situation in this regard, having had, on the contrary, an accelerating effect on the phenomenon. On the other hand, it has brought an advantage for those looking to rent a residence in Johor Bahru; Rental prices remain relatively affordable and only increase a little from year to year. It is now easier to negotiate prices with the owners.
The fact that construction has exceeded demand is indeed great news. As a result, housing prospects on Johor Bahru remain bright. Expats can now enjoy a wider choice of accommodation at affordable prices.
A large share of expats living in Johor Bahru these days are Singaporean citizens or residents. Many of them are still working in Singapore and commuting daily. Moreover, the majority of real estate investors and developers in Johor Bahru come from Singapore. It is, therefore, all-natural that the city is nowadays considered some sort of Singaporean suburb. However, there are also many opportunities for those who wish to work in Johor Bahru.
Where to live in Johor Bahru
Members of the expat community living in Johor Bahru have chosen popular condominiums, as this type of accommodation offers modern amenities and includes housekeeping. Most of these are found in the city centre and nearby, which makes it more convenient for people working in town.
Following the success of its first waterfront project called Danga Bay, property developer Country Garden had plans to add thousands of luxury condos to Johor Bahru's real estate market. Country Garden's Forest City was built on four man-made islands, with the aim of housing 700,000 people within an area four times the size of New York's Central Park. Unfortunately, the advent of Covid-19 in Malaysia at the beginning of 2020 caused such economic uncertainty that more than 90% of new homes built still remain vacant to this day. The Covid crisis has also caused the freezing or cancellation of more than sixty large-scale projects around the city.
Since the launch of Iskandar, several residential neighborhoods have been built in the east of Johor Bahru. They are gathered in an area called Nusajaya, very close to the 2nd Link bridge that connects the city to Singapore. Most of the accommodations on these properties are pavilions, apartment buildings, and townhouses. Horizon Hills, Leisure Farm, East Ladang, Bukit Indah, Ledang Heights, Puteri Harbor and Medini are some of the most popular residential areas among retirees, investors, and expats, especially those working in Singapore.
Residents of Johor Bahru who populate such residential areas can travel to Singapore CBD in just 45 minutes from East Ledang or Leisure Farm, as these are less than a 10-minute drive away, off the 2nd Link bridge.
Proximity to Singapore and security are the key assets of these properties. They also benefit from luxurious amenities such as golf courses, swimming pools, spas, jacuzzis, and gyms, and it is possible to have your own garden.
Taman Mount Austin, also known as Austin Heights, is a very popular residential area for young professionals and students in Johor Bahru. The area is very lively and is considered the city's equivalent of what Subang Jaya is to the state of Selangor. There are many trendy cafes, bars and nightclubs. Residents from the neighborhood also have access to many amenities, such as several shopping centers (Jusco, Tesco, Carrefour and Giant), as well as the excellent Sultan Ismail Hospital. Mount Austin has a wide variety of villas, bungalows, apartments, terrace houses, or semi-detached houses available. Many of these residences are occupied by young Malaysians or expatriates.
Muar is a quieter part of town. There are several religious landmarks (mainly mosques) or historical buildings there. The most famous of these buildings is Kubu Bantayan, the last stronghold of the Sultanate of Malacca before the 16th-century Portuguese invasion that caused its fall. Muar is also home to several museums and art galleries. Most residents are older and/or retired or live with families in very comfortable little houses. The district is also renowned for the many street food stalls that populate its streets. The local specialty is otak-otak, a succulent noodle dish with shrimp.
If you have come to Malaysia with your family and want to settle in Johor Bahru, it is better to opt for Skudai Township. The district has all the necessary facilities for a quiet family life: education, healthcare, parks, leisure… Skudai has no less than six shopping centres, the most popular of them being the Paradigm Mall. The district is also home to the Universiti College Malaysia, but there is a smooth cohabitation between the young university students and the neighboring families.
Accommodation costs in Johor Bahru
The rental market in Johor Bahru is very much favorable for renters now. There are indeed more vacant units than potential tenants. Rental prices are being revised downwards as the market develops, especially with the Covid crisis. This means that right now, you are in a good position to try to negotiate the cost of your rent.
The monthly rent varies consequently to the neighborhood and the type of residence. A one-bedroom apartment will cost around RM1,350 in the city center compared to just over RM1,000 in the suburbs. Similarly, renting a 3-bedroom apartment will cost around RM2,100 in the city center and RM1,400 in the suburbs.
Renting a residence in a residential subdivision on the outskirts of Johor Bahru ranges from RM2,500 to RM10,000 per month. From RM2,500, you can look to rent a 230-square-meter semi-detached house in a residential property like Horizon Hills.
Those who wish to buy a house or apartment could benefit from good deals right now in Johor Bahru. Nevertheless, the instability of the market and the real estate bubble caused by the growing number of projects means that such a bet can be risky or really pay off big in the long run. Better to take this risk only if you are financially stable.
Finding accommodation in Johor Bahru
To find rental accommodation in Johor Bahru that suits your needs and budget, it is recommended that you contact a real estate agent. Agency fees are the responsibility of the owner, so there will be no extra charge on your part. However, it is advisable to check this information well in advance.
You can also check out specialized sites, which allow you to filter ads based on your budget and conditions. It is also worth taking a look, from time to time, at the classified ads published in local newspapers if you are already in Malaysia because you can sometimes find excellent deals therein.
The Malaysian real estate market
The real estate market in Malaysia has been in crisis for a few years now. Actually, the supply greatly exceeds the demand throughout the country, and Kuala Lumpur is not spared. According to Global Property Guide, an online real estate analysis platform, the value of many unsold apartments in Malaysia's biggest cities was estimated to be around RM18.48 billion ($4.41 billion) in August 2021.
The Covid-19 crisis in Malaysia obviously had something to do with it, but the problem dates from before 2020, which means that the coronavirus only had an accelerating effect on the Malaysian housing crisis. This national phenomenon is due to the construction of countless high-end residences over the last decade across the country, especially in large urban centers such as Kuala Lumpur and its outskirts, as well as in Johor Bahru.
To address this issue, the Malaysian government has taken several measures. However, Global Property Guide estimates that the results of such measures would only have mitigated effects. To combat overbuilding, the authorities have, for example, tried to control speculation and reduce the number of additional construction sites by discouraging developers. Stamp duty has been revised upwards on properties worth more than RM1 million, from 3% to 4%, while tax on real estate gains has been increased by 5%. Nevertheless, these measures have been eased following the advent of the pandemic in order to provide a minimum of relief to developers and to promote economic recovery by encouraging investment.
Currently, the average value of a terraced house in Malaysia is around RM400,000. In Johor State, this average is around RM320,000 currently. For comparison, the average price of properties of the same type located in Kuala Lumpur is worth almost double, or around RM778,000. Prices continue to fall, creating opportunities for potential investors willing to bet on a recovery in the Malaysian property market in the near future, but it can be a risky bet. The beneficiaries of this situation are undoubtedly those who plan to settle long-term or permanently in Malaysia and buy a property to live there, but also potential tenants who can negotiate better prices.
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