Red flags raised in Johor property market

[JOHOR BAHRU] The property market in Johor, particularly Iskandar Malaysia, might be a case of too much too soon. According to The Star newspaper, red flags are showing in the state where launches of projects and high prices are commonplace but the pace of launches, which now includes "carpet building" by China developers, is flooding the market with more houses than what could be sustainable.

"We welcome foreign developers including those from China, but flooding the market with massive supply of properties could create property overhang," Johor Real Estate and Housing Developers Association (Rehda) chairman Koh Moo Hing told the daily during the weekend.

Latest data by the National Property Information Centre (Napic) indicate that the amount of new homes being built in the near future is equivalent to 42 per cent of the stock of 702,101 houses in the state. Almost 300,000 homes are being built or in the planning stage at a time when the market in Johor has hit a soft patch. Napic data show that at the third quarter of last year, construction for 116,859 homes had already started while the building of 162,579 homes have yet to start.