2009 is a period of uncertainty for the property market due to the global financial meltdown and developers should reposition themselves, says Samuel Tan, director of KGV-Lambert Smith Hampton (Johor) Sdn Bhd.

“Developers who have gone through the meltdown, which caused a slowdown in demand, need to take stock on how to position themselves for recovery,” says Tan, adding that developers need to think of the products they want to offer to the public.

“They may think of providing more affordable homes in these times when home buyers are financially tight. They also need to think about the pricing. Who is their target - the mass market? Upgraders? Deluxe market?” he says.

With 2009 and 2010 presenting many challenges for the property market, developers also need to think about rebranding. Developers need to think about how the market perceives them, before and after the crisis, explains Tan.

For example, S P Setia Bhd in 1997 was known in Johor as a mass producer but after the crisis in 1997, the company rebranded itself as a high end and commercial developer, says Tan.

“Developers need to think about their marketing strategy; will they be conventional or think out of the box? One such innovative strategy by S P Setia is their recently launched Setia 5/95 Home Loan Package. There are also a lot more strategies to rebrand a company,” he says.

Johor – A Different State

“Quarter on quarter, the volume has been declining. The fourth quarter (of 2008) was exceptionally slow, experiencing an immediate impact from the meltdown. Having said that, the fourth quarter is also traditionally a slower month with most of the population spending on festivities,” Tan says.

While the market may be slow for one to two years before going into recovery, the demand in Johor remains good, what with its proximity to Singapore, resulting in a spill over effect; and while other regions experienced a surge in value over the last few years, Johor has remained rather stable or “dull” as some may call it, prior to the launch of Iskandar Malaysia (IM).

“Because of that, the drop in value was not major, the impact not as bad because values were not as high,” explains Tan.

Johor is predominantly occupied by Malaysians who travel to Singapore for work, including people working in the services and manufacturing industries. Due to the attractive prices in Johor, many who work and live in Singapore may consider moving to Johor to save costs.

“Many Malaysians working in Singapore will be affected, affecting the Malaysian market. We need to take this into consideration while designing our housing schemes for the people,” says Tan, adding that IM is more viable than other corridors in Malaysia due to a number of factors.

The 20-year programme, which began two years ago, is slowly taking form and shape. “One good thing is that it didn’t move so fast; therefore there are no abandoned projects. Here at Johor, it is slow and steady, but we still need to restrategise to fit into the current climate,” explains Tan.

“The federal and state governments are actively involved, funds have been allocated and things in IM began two years ago so a lot of projects are already out. The question is how to sustain the growth and how to bring in the stakeholders,” he says.

“There are people who want to look into Johor as alternative homes,” says Tan, adding that there are many foreigners who are interested and discovered Johor via the heavy promotions of IM. Apart from that, high profile projects also attract locals.

“Depending on the project, developers are now keen on Johor. This year and next year will see many things coming up, but for the moment things are moving at a slower rate,” he explains.

Johor’s Hot Spots

The city centre of Johor will see a proliferation of apartments due to lack of land. Meanwhile, pockets of land available would most likely see high end and high rise properties. The new CIQ Complex (Bangunan Sultan Iskandar Customs, Immigration and Quarantine) is also expected to change the landscape, says Tan, adding that apart from the city centre, there are several parts of Johor which are worth looking at.

Skudai Corridor - Covering Johor Bahru to Kulai and areas such as Perling, Bukit Indah and Taman Sutera, the Skudai corridor is expected to see movement with the widening of the highway, which would make it more accessible and popular.

“The Western Coastal Highway will link up the city centre to the Johor state administrative centre, cutting down travel time by 15 minutes. Housing schemes along the highway would also benefit,” says Tan. It took three years to come up with the new highway.

Tebrau Corridor - From Johor Bahru to Ulu Tiram, the Tebrau corridor is a mature area, experiencing changes from its mass market days. In the last five years, this area saw the emergence of many high end properties, including gated and guarded communities, and properties such as semi-Ds sized 6,000 sqf and above.

Pasir Gudang Corridor - The Pasir Gudang corridor runs from Taman Johor Jaya to Pasir Gudang, offering low to mid range homes. The ongoing Southern Link, to be completed in two years’ time, would provide an alternative access to Pasir Gudang.

Nusajaya - “This is the new frontier, new to the Second Link,” says Tan. With UEM Land championing its growth, Nusajaya has been attracting foreigners with its contemporary and international flavour with theme parks such as Legoland and the luxurious waterfront project, Puteri Harbour.