TRAVERSING

DOWN SOUTH
About us
.Incorporated in 1982, Raine & Horne International Zaki + Partners Sdn.
Bhd. is a firm of Chartered Surveyors and Registered Valuers. Our practice
covers a wide range of services including property valuation, investment and
project management, property management, real estate agency and
property consultancy.

The firm currently operates twelve (12) offices in Malaysia: Kuala Lumpur,
Petaling Jaya, Subang Jaya, Kelang, Johor Bahru, Melaka, Ipoh, Seremban,
Kuantan, Penang, Kota Kinabalu and Kuching.

Since its inception and establishment, Raine & Horne International Zaki +
Partners Sdn. Bhd. has enjoyed an outstanding and enviable reputation and
success. The firm has received wide recognition from all quarters, nationally
and internationally.

Founded in 1883, Raine & Horne is one of the worlds largest real estate
organisations with offices and affiliates all over the world, including in the
major cities of South East Asia, Europe, Canada, USA, Fiji, Australia, New
Zealand, Japan and Africa.

Raine & Horne International Zaki + Partners Sdn. Bhd. aims to provide our
clients with quality professional service. Raine & Horne International Zaki +
Partners Sdn. Bhd. is committed to the Quality Management System required by
ISO 9001:2008 Standards.

Our team comprises of highly qualified partners in various expertise which

authorize us to offer broad ranges of services in:
Professional Valuation Services
Corporate Advisory Services
Project Management
Property Management & Maintenance
Real Estate Agency
Auctioning
Market Research & Feasibility Studies
Property Investment Consultancy
Building Auditing
Bio Asset Valuation
Forensic Valuation
CYF.A9/11.14 2
Contents

Summary.....................4
Overview.........................7
Components of Johor.....................8
Basic Information.........11
Residents Data.....................................15
Property Market in Malaysia..19
Residential Market in Johor...............26
Residential Market in JB.....................34
Residential Market in Johor ex. JB....36
References.....38
Contact Us.39
International Affiliations.40

CYF.A9/11.14 3
Summary
.Basic Information
Down south at the Peninsular of Malaysia, the state of Johor is located at the
edge of the Asian continental mainland. It is the 5th largest state in Malaysia by
land area and the 2nd most populated state after Selangor (surpassing Sabah in
recent years). Johor is also one of the most developed states in Malaysia after
prominent names such as Selangor, Penang, and Negeri Sembilan. The current
state capital and royal city of Johor is Johor Bahru (JB). In terms of economic
development, Iskandar is the main driver in Johor. It is intended to draw
investment and business to Johor and will be among the biggest development
projects in Malaysia. The state administrative capital will be moved to
Nusajaya. Residential areas include Bukit Indah and Horizon Hills townships.

This southern state accounts for a moderate portion of Malaysias land mass and
is quickly emerging as one the fastest growing state in Malaysia. However,
Johor is still falling behind in various aspects compared to the more advanced
states such as Selangor and Penang. They include productivity, healthcare,
population size, concentration, urbanization, labour force, job opportunities,
income, and property market. Johors property value made up 19% of its GDP
output for 2013. The amount of activity in this area was higher than the national
average with greater percentile of property transactions per 100 population.
Moreover, this rate of increment is rising rapidly.

Residents in Down South preferred to dwell nearer to the centre of commercial

and industrial activities, and major ports within the state. They include capitals
and industrial zones such as Johor Bahru and Batu Pahat. On the other hand,
Malaysias population is aging slowly (but still in its early stages). Median age
was 26.2 in 2010. Higher number of the population are leaving childhood and
entering the workforce. This is the same for Johor. This region has one of the
lowest dependency ratio in the country, which suggests job opportunities are
abundant which led to the retaining of young working adults within the state.
As for ethnicity, Johor has a higher Chinese composition than that of Malaysia
as a whole.

The LQ/H ratio which came in at 1.18 for Down South has confirmed that there
are no current shortages of houses in this area. Districts such as Batu Pahat,
Segamat, and Kulaijaya are showing early signs of excess supply. While the
district of Johor Bahru has a similar ratio of 1.17 with sub-districts of Pasir
Gudang and Kulai showing signs of excess supply.
CYF.A9/11.14 4
Summary
Property Market
The property market is highly cyclical with a high correlation between volume
and value. However, this trend was not observed in 2013. Value increased
moderately, while volume dropped considerably. Average price per transaction
had the best run in the 10 years being reviewed. Nonetheless, the residential
sector was more resilient compared to the rest of the market.

Residential sector made up the bulk of the total property market in Malaysia as
well as Johor. The number of transactions for Johor accounted for 14% of the
total transactions of Malaysia. Turnover rate was weak at 3.04%, but has
improved slightly in terms of YOY. While percentage of unsold new launches
was at the middle range of the countrys list. Within the vicinity of Johor, there
was shift in weightage from the agricultural to residential sector in 2013.

The district of JB held the majority of residential transactions (55%) for Johor,
due to its considerable population size, state of development, and progress of
Iskandar. In terms of YOY, Johor was one of the exceptional state which
recorded high growth in contrast to the nations reading.

Johor provides 16% of the total residential supply in Malaysia, which is higher
than the number of transactions (14%) as mentioned earlier. IS/ES and PS/ES
ratios for Johor were higher than national average, with the latter exceeding by
a substantial amount.

Distribution for the value of transactions in Down South was quite balanced;
with highest being RM 300,001 400,000 (14.72%), followed by RM 500,001
1,000,000 (13.45%), and RM 150,001 200,000 (13.28%). 2 3 and single
storey terrace houses were the most transacted residential types. All house types
recorded double-digit positive YOY changes for average price per transaction
and the rate of increment seemed to be consolidating in the near term when
compared to QOQ.

The immense preference for terrace houses was fairly symmetrical between JB
district and Johor ex. JB with 2 - 3 storey terrace houses being the main choice
in the former and single storey terrace houses for the latter. Considerable
weightage of strata properties was only present in JB district while such
properties had a minimal presence in Johor ex. JB.

CYF.A9/11.14 5
Summary
A growing number of transactions was witnessed within the price range of RM
300,001 1,000,000 in Q1 2014. In addition, average gross rental yields for
Johor Bahru, Muar Town, and Bukit Indah@Iskandar were quite satisfactory
according to their respective house types.

Figure 1: Q1 2014 QOQ changes of Johor for Residential Volume and

Average Price per Transaction (NAPIC, 2014).

18.55

14.49
11.98
QOQ CHANGES (%)

JB -0.39 JOHOR EX. JB TOTAL JOHOR

-6.80

-11.44

VOLUME AVERAGE PRICE PER TRANSACTION

A summary of the current residential market in Johor can be illustrated in the

volume and price chart of Figure 1.

In the most recent quarter of Q1 2014, JB district recorded a higher growth in

average price per transaction and a higher decline in volume transacted than the
rest of Johor. The performance of Johor as a whole was in a better condition
than the countrys average.

CYF.A9/11.14 6
Overview
Down south at the Peninsular of Malaysia, the state of Johor is located at the
edge of the Asian continental mainland. It is the 5th largest state in Malaysia by
land area and the 2nd most populated state after Selangor (surpassing Sabah in
recent years). Johor is also one of the most developed states in Malaysia after
prominent names such as Selangor, Penang, and Negeri Sembilan. The current
state capital and royal city of Johor is Johor Bahru (JB), which was formerly
known as Tanjung Puteri and Muar respectively. The old state capital is Johor
Lama, which is situated at the modern day of Kota Tinggi district.

Geographically, the state of Johor is flanked by Pahang to the north, Melaka

and Negeri Sembilan to the northwest, and the Republic of Singapore to the
south (separated by the narrow Straits of Johor). Historically, the sultanate of
Johor was founded in the early 16th century. It was one of two successor states
of the Melaka empire, with the other being the sultanate of Perak. Johor was
also the birthplace of the United Malays National Organization (UMNO) by
Dato Onn Jaafar in 1946.

Johor is linked to Singapore via two road connections; the Johor-Singapore

Causeway and the Malaysia-Singapore Second Link. The Causeway also
carries a railway line, which is now part of the main rail route linking Singapore
with Thailand via Kuala Lumpur, Ipoh, and Butterworth. While the state has 3
major ports; mainly the Pasir Gudang Port, the Tanjung Pelepas Port, and the
Tanjung Langsat Port (all within the district of Johor Bahru). Johors
international airport (Senai) is located within the Johor Bahru district as well,
which formed part of the Flagship Zones of Iskandar.

In terms of economic development, Iskandar is the main driver in Johor. It is

intended to draw investment and business to Johor and will be among the
biggest development projects in Malaysia. The state administrative capital will
be moved to Nusajaya. Residential areas include Bukit Indah and Horizon Hills
townships.

CYF.A9/11.14 7
Components of Johor
Iskandar Malaysia, formerly known as Iskandar Development Region and
South Johor Economic Region is the main southern development corridor in
Johor. It was established in 2006, with the development region encompasses an
area of 2,217 km2 covering city of JB and adjoining towns of Pontian, Senai,
Pasir Gudang, and the construction of a new administrative capital in Nusajaya.

Iskandar is modelled after the Pearl River Delta Economic Zone, and is
envisaged to capitalize on its current synergies with Singapore as it aims to
complement each other as an economic hub. The 5 Flagship Zones are
identified as development focal points, which will be depicted in the subsequent
map of Iskandar.

Figure 2: Johor-Singapore Causeway (left), and Legoland@Iskandar (Right).

There is no current official designation of boundaries for Johor and groupings

of selective areas could be highly subjective. For the purpose of studying the
housing market, these selective areas are grouped according to the National
Property Information Centre (NAPIC, 2014). They include:

1. Johor (10 districts)

(Batu Pahat, Johor Bahru, Kluang, Kota Tinggi, Mersing, Muar, Pontian,
Segamat, Kulaijaya, Ledang)
2. Johor Bahru district (4 sub-districts)
(Johor Bahru Tengah, Johor Bahru, Pasir Gudang, Kulai)

CYF.A9/11.14 8
Components of Johor
Figure 3: Map of Johors districts (2010 Population and Weightage
in brackets) (Department of Statistics Malaysia, 2014).

6. 135,575
(6%)

5. 201,148
10. 33,741
(8%)
(1%)

7. 131,890 4. 215,416
(5%) (9%)

2. 262,684
(11%)
9. 84,971
(3%)

3. 245,294
(10%)

1. 1,061,950
(43%)
8. 93,651
(4%)

TOTAL JOHOR = 2,466,320:

(10% OF MALAYSIA)

CYF.A9/11.14 9
Components of Johor
Figure 4: Map of JBs districts (2010 Population and Weightage in brackets)
(Department of Statistics Malaysia, 2014).

4. 2,850
(<1%)

2. 497,067
(47%)
1. 515,462
(49%)

3. 46,571
(4%)

TOTAL JB = 1,061,950:
(43% OF JOHOR)

Figure 5: Five designated areas in Iskandar Johor (JB).

CYF.A9/11.14 10
Basic Information
Table 1: Depiction of Johor and Malaysia (2012) (Department of Statistics
Malaysia, 2014).
JOHOR MALAYSIA %
DEPICTION MEAN
2010 2011 2012 (2012) (2012)
1. AREA (KM2) 19,016 19,016 330,290 5.76
2. POPULATION (MILLION) 3.36 3.41 3.46 3.41 29.52 11.72
3. AVERAGE ANNUAL POPULATION GROWTH
RATE (%) 1.60 1.40 1.30 1.43 1.60 -0.30
4. TOTAL FERTILITY RATE 2.10 2.20 2.20 2.17 2.10 0.10
5. LIFE EXPECTANCY (YEARS) 73.97 74.17 74.21 74.12 74.63 -0.56
6. GDP
(A) GDP AT CONSTANT 2005 PRICES
(RM MILLION) 60,679 64,566 68,791 64,679 751,471 9.15
(B) GDP PER CAPITA AT CURRENT PRICE (RM) 21,329 23,533 24,452 23,105 30,956 -21.01
(C) GDP GROWTH RATE (%) 9.80 6.40 6.50 7.57 5.60 0.90
7. EMPLOYMENT
(A) LABOUR FORCE ('000) 1,453.50 1,495.00 1,524.50 1,491.00 13,119.60 11.62
(B) PARTICIPATION RATES (%) 64.00 64.70 64.90 64.53 65.50 -0.60
(C) UNEMPLOYMENT RATE (%) 2.40 2.50 3.20 2.70 3.00 0.20
According to table 1, it is worth noting that the state of Johor has a land area of
19,016 km2, which is only 5.76% of the countrys total land mass. However, the
subsequent data of the area is not proportional to its land size. Johor is home to
about 11.72% of the countrys total population, produces 9.15% of the countrys
GDP, and supplies 11.62% of Malaysias total labour force.

Average annual population growth rate and life expectancy are both -0.30% and
-0.56% lower than the national readings, whereas total fertility rate is 0.10%
higher. Annual population growth rate was decreasing in the 3 years being
examined, which was in line with the national trend. Fertility rate was stable at
around 2.20, which is the normal replacement fertility rate. Life expectancy was
improving but still lagged behind the national average.

GDP growth rate of Johor was 0.90% higher than average and GDP per capita was
-21.01% lower than the countrys mean. It was observed that GDP growth rate was
cooling, while GDP per capita was improving. Such data illustrates the potential of
Johor to improve on its productivity and standards of living. Job opportunities are
comparable for Johor to other parts of the nation with unemployment rate of 0.20%
higher than the national average, while participation rate was improving.

CYF.A9/11.14 11
Basic Information
Table 2: Continuation of Economic Data (2013) (Department of Statistics
Malaysia, 2014).
DEPICTION JOHOR MALAYSIA %

1. GDP (NOMIMAL) (RM BILLION) 86.14 940.97 9.15

2. PROPERTY MARKET VALUE (RM BILLION) 16.77 142.84 11.74

3. PROPERTY MARKET VALUE/GDP (NOMINAL) (%) 19.47 15.18 4.29

4. DENSITY (PER KM2) (2010) 174.00 86.44 101.30

5. URBANISATION RATE (%) (2010) 71.90 71.00 0.90

Besides providing a marginal share of the nations GDP, Johors property market
was slightly ahead compared to its pace of development. In 2013, the areas
combined nominal GDP and property market value accounted for 9.15% and
11.74% of that of the nation; with its property market growth rate and prices
increasing at a faster rate than its GDP growth rate.

Property market of this southern state made up a significant share of the local
economy; ratio of property market value per GDP was 19.47%, which was 4.29%
higher than Malaysia. Population density and urbanization rate were 174 person per
km2 and 71.90% respectively. They were 101.30% and 0.90% higher than
Malaysias average. Such figures depict that Johor is a fairly concentrated and
urbanized area in the context of a nation.

Johors property market was noticed to be more vibrant compared to the national
average. Number of property transactions per 100 population =
2013: (Johor): 1.53; (Malaysia): 1.30
2012: (Johor): 1.45; (Malaysia): 1.50

In addition, it was noticed that Johor recorded the highest improvement for
transacted volume of property market in the country. It was one of two states that
managed to register a positive YOY change in 2013 (the other being Perlis). YOY
change for number of transactions was recorded at 7.07%, which was better than
the countrys mean of -10.85%. Whereas value of transactions increased by 79.57%
last year, compared to a 6.67% increment for the nation (JPPH, 2014).

CYF.A9/11.14 12
Basic Information
Table 3: Grouping of Household and Living Quarters by District (2010)
(Department of Statistics Malaysia, 2014).
LIVING
DISTRICT HOUSEHOLD % % PERSON / H PERSON / LQ LQ / H
QUARTERS
BATU PAHAT 60,757 10.18 74,456 10.59 4.32 3.53 1.23
JOHOR BAHRU 265,737 44.53 310,720 44.18 4.01 3.43 1.17
KLUANG 53,226 8.92 60,249 8.57 4.05 3.58 1.13
KOTA TINGGI 20,031 3.36 23,593 3.35 4.24 3.60 1.18
MERSING 8,349 1.40 9,161 1.30 4.04 3.68 1.10
MUAR 48,528 8.13 57,288 8.15 4.14 3.51 1.18
PONTIAN 21,664 3.63 24,796 3.53 4.32 3.78 1.14
SEGAMAT 34,395 5.76 42,290 6.01 3.96 3.22 1.23
KULAIJAYA 53,607 8.98 64,795 9.21 4.58 3.79 1.21
LEDANG 30,455 5.10 36,000 5.12 4.33 3.66 1.18
TOTAL 596,749 100.00 703,348 100.00 4.14 3.51 1.18

- Ratio of existing residential stock per 100 population =

(Johor): 20; (Malaysia): 16.
- Ratio of total population to number of person per household =
(Johor): 835,748 unit of houses (breakeven point); assuming household size is
held constant.
- Existing residential stock =
(Johor): 705,929 unit of houses (an additional of 129,819 units is required to
reach breakeven point); assuming household size is held constant.

As expected, the district of Johor Bahru recorded the highest count for both the number of
household (265,737: 44.53%) and living quarters (310,720: 44.18%). Coming in second
was the district of Batu Pahat with 60,757 households (10.18%) and 74,456 living
quarters (10.59%). Kulaijaya was third; with households and living quarters at about 9
percent of Johor.

In terms of ratio for person per household, Segamat was the lowest (3.96), followed by
Johor Bahru (4.01), and Mersing (4.04). While districts with the lowest ratio of person
per living quarter were Segamat (3.22), Johor Bahru (3.43), and Muar (3.51). These
districts were assumed to have the highest purchasing power within Johor. The states
average for person per household and person per living quarter were 4.14 and 3.51
respectively.

Johors LQ/H ratio which came in at 1.18 has confirmed that there was no current
shortages of houses in this area. Stock availability was quite sufficient as well. However,
districts such as Segamat (1.23), Batu Pahat (1.23), and Kulaijaya (1.21) were showing
early signs of excess supply. Reading for Johor Bahru which came in at 1.17 was quite
healthy inline with the progress of Iskandar.
CYF.A9/11.14 13
Basic Information
Table 4: Grouping of Household and Living Quarters by JB Sub-district (2010)
(Department of Statistics Malaysia, 2014).
DISTRICT HOUSEHOLD % LIVING % PERSON / PERSON / LQ / H
QUARTERS H LQ

JOHOR BAHRU TENGAH 129,854 48.87 150,983 48.59 3.97 3.41 1.16
JOHOR BAHRU 124,612 46.89 145,797 46.92 3.99 3.41 1.17
PASIR GUDANG 10,641 4.00 13,155 4.23 4.38 3.54 1.24
KULAI 630 0.24 785 0.25 4.52 3.63 1.25
TOTAL 265,737 100.00 310,720 100.00 4.00 3.42 1.17

The sub-district of Johor Bahru Tengah; which is home to the Flagship Zone of B and C
of Iskandar, recorded the highest count for both the number of household (129,854:
48.87%) and living quarters (150,983: 48.59%). Following closely was the sub-district of
Johor Bahru with 124,612 households (46.89%) and 145,797 living quarters (46.92%).
Pasir Gudang was third; with households and living quarters at about 4% of Johor Bahru
district. Last was sub-district of Kulai with less than 1% of each.

In terms of ratio for person per household and person per living quarter, Johor Bahru
Tengah was the lowest (3.97 and 3.41), followed by Johor Bahru (3.99 and 3.41), Pasir
Gudang (4.38 and 3.54), and Kulai (4.52 and 3.63). Districts with lower ratios were
assumed to have higher purchasing power. The districts average for person per household
and person per living quarter were 4.00 and 3.42 respectively.

LQ/H ratio for district of JB which came in at 1.17 has confirmed that there was no
current shortages of houses in this area. Stock availability was quite sufficient as well.
However, districts such as Kulai (1.25) and Pasir Gudang (1.24) were showing early signs
of excess supply.

It is anticipated that there could be a high possibility of smaller household size in the
future. Such a reduction in the number of person per household would directly increase
the demand for new living quarters and strain the existing housing stock in the market.

CYF.A9/11.14 14
Residents Data
Figure 6: Breakdown of Johors population by district (2010)
(Department of Statistics Malaysia, 2014).
LEDANG PONTIAN
5% 4%
SEGAMAT
6% KOTA TINGGI
JOHOR BAHRU 3%
MUAR
43%
8% MERSING
1%
KLUANG
9%

KULAIJAYA
10% BATU PAHAT
11%

It may seem logical that most inhabitants will usually reside around the central
hub of commercial and industrial activities, and ports. In the context of Down
South, this area of central activities include state capitals and industrial zones.
They consist of the district of Johor Bahru and Batu Pahat. While within the
district of JB, sub-districts of Johor Bahru Tengah and Johor Bahru account for
almost the entire population of that specific district.

Figure 7: Breakdown of JBs population by district (2010)

(Department of Statistics Malaysia, 2014).
PASIR GUDANG KULAI
4% 0%

JOHOR BAHRU
JOHOR BAHRU TENGAH
47% 49%

CYF.A9/11.14 15
Residents Data
Figure 8: Demographics of Malaysia by Age (2000 & 2010) (Department of
Statistics Malaysia, 2014).
80.00

70.00 67.30
62.80
60.00
WEIGHTAGE (%)

50.00

40.00
33.30
30.00 27.60

20.00

10.00 5.10
3.90

0.00
< AGE 15 AGE 15-64 > AGE 64
AGE GROUP

2000 2010

Age
Malaysias population is aging slowly (but still in its early stages); with lower
portion of children age group (< age 15) in 2010 compared to 2000. Working age
adults (age 15 - 64) and retirement segments (> age 64) have increased by 4.5%
and 1.2% respectively. Median age has increased from 23.6 (2000) to 26.2
(2010); which is still a relatively young population.

The countrys dependency ratio has dropped from 0.59 (2000) to 0.49 (2010),
reinforcing the fact that:
1. Population growth is slowing
2. Children age group is diminishing (entering the age of workforce)
3. Working age group is increasing
4. More working adults are supporting the non-working classes
(children and elders).

CYF.A9/11.14 16
 Residents Data
Figure 9: Demographics of Johor by Age (2010) (Department of
Statistics Malaysia, 2014).
1,000,000
900,000
800,000
700,000
POPULATION

600,000
500,000
400,000
300,000
200,000
100,000
0
0-19 20-29 30-39 40-49 50-59 60-75+
JB JOHOR EX. JB AGE GROUP

Figure 10: Dependency ratio of Johor (2010) (Department of Statistics

Malaysia, 2014).
DEPENDENCY RATIO

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

JB JOHOR EX. JB

This south territory accounts for 11.72% of the total population in Malaysia and has a
dependency ratio of 0.78; which is quite healthy. This indicates that the proportion of
non-working age groups (children and elders) is lower than the working age groups. It
was worth noting that the district of JB has the lowest dependency ratio of 0.67 within
Johor, while the rest of Johor was higher at 0.88.

The overall population of Johor is very young as well; which is in tandem with the
national average. The 3 largest age groups are 0-19 (35.55%), 20-29 (19.85%), and 30-39
(14.93%). They account for 70.34% of the total population in Johor. The demographics of
Johor by age is somewhat comparable to Klang Valley in relative terms. This shows that
job opportunities were abundant in Johor with majority of the young working adults
staying put in the state.

CYF.A9/11.14 17
Residents Data
Figure 11: Demographics of Malaysia by Ethnicity (2010) (Department of
Statistics Malaysia, 2014).
NON- Malaysia has a total population of
OTHERS CITIZEN
1%
28.30 million as at 2010; with
8%
INDIANS 61.87% as Bumiputeras, 22.58%
7%
as Chinese, 6.70% as Indians,
0.64% classified as others, and
CHINESE
8.20% as non-citizens.
22% BUMI
62%

Figure 12: Demographics of Johor by Ethnicity (2010) (Department of

Statistics Malaysia, 2014).
1,400,000
1,200,000
1,000,000
POPULATION

800,000
600,000
400,000
200,000
0
BUMIPUTERA CHINESE INDIANS OTHERS NON-CITIZEN

JB JOHOR EX. JB
ETHNICITY

Ethnicity
Johor has a very high composition of Chinese compared to that of Malaysia;
47.63% Bumiputeras, 36.69% Chinese, 7.26% Indians, 0.43% others, and
7.99% non-citizens. While the district of JB has a quite similar ethnic
proportion as the greater Johor.

In the state of Johor, districts with high composition of Chinese (>40%) include;
Batu Pahat (41.21%), Segamat (41.12%), and Muar (40.54%). While sub-
districts of Johor Bahru Tengah (43.68%), and Johor Bahru (34.73%) displayed
the highest Chinese ethnicity in the district of Johor Bahru.
CYF.A9/11.14 18
Property Market in Malaysia
Figure 13: Malaysias Overall Property Market (2004 2013) (NAPIC, 2014).
50.00

40.00

30.00
% CHANGE YOY

20.00

10.00

0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-10.00

-20.00

VOLUME (% CHANGE) VALUE (% CHANGE) AVERAGE PRICE PER TRANSACTION (% CHANGE)

The property market in Malaysia is highly cyclical. There is a high correlation

between volume and value (correlation of efficiency value of 0.75; from 2003 -
2012). 2013 proved to an excepting year, which recorded the worst decline in
amount of transaction for the last 10 years; declining by -10.85% YOY.

However, the total value of transaction recorded a decent gain of 6.67% YOY. This
led to the biggest yearly gain in the last 10 years for the average price per
transaction (rising by a staggering 19.65%). It is yet to be determined that such a
rise in average price per transaction is sustainable if volume does not exist to
support it.

CYF.A9/11.14 19
 Property Market in Malaysia
Figure 14: Volume of Malaysia Property Market by Sectors (2004 2013)
(NAPIC, 2014).
40.00

30.00
% CHANGE YOY

20.00

10.00

0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-10.00

-20.00

RESIDENTIAL COMMERCIAL INDUSTRIAL AGRICULTURAL DL & OTHERS

Volume
2013 saw a broad decrease over all sectors of the property market; led by the
commercial sector (-16.51%), industrial (-15.69%), agricultural (-12.37%),
residential (-9.70%), and development land and others (-6.99%).

Value
Unlike volume, the commercial sector witnessed the highest incremental in value
(27.96%), followed by the residential sector (6.34%), industrial (2.69%),
agricultural (-6.97%), and lastly development land and others (-8.89%).

For both of these instances, the residential property sector showed resilience
compared to the rest of the market.

Figure 15: Value of Malaysia Property Market by Sectors (2004 2013)

(NAPIC, 2014).
80.00

60.00
RESIDENTIAL
40.00
% CHANGE YOY

COMMERCIAL
20.00
INDUSTRIAL
0.00
AGRICULTURAL
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-20.00
DL & OTHERS
-40.00

-60.00

CYF.A9/11.14 20
Property Market in Malaysia
Figure 16: Malaysias Average Price per Transaction by Sectors (RM in Million
(2004 2013) (NAPIC, 2014).

Average price per transaction

In 2013, the commercial sector recorded the biggest change in the last 10 years
(53.27%), followed by the industrial sector (21.79%), residential (17.76%), and
agricultural (6.16%). Whereas average price per transaction for development land
and others marked the steepest unusual decline in the last 10 years (-43.28%).

Abiding by the norm, the industrial sector has the highest average price per
transaction of RM 1.46 million, followed by commercial (RM 1.04 million),
development land and others (RM 0.89 million), residential (RM 0.29 million),
and agricultural (RM 0.14 million).

CYF.A9/11.14 21
Property Market in Malaysia
Figure 17: Weightage of Malaysia Property Market by Sectors (Volume)
(2004 2013) (NAPIC, 2014).

Weightage of sectors
The residential market made up the bulk of the total property market in
Malaysia; with a 10 year mean value of 63.87%, followed by the agricultural
sector (19.59%), commercial (9.36%), development land and others (4.67%), and
industrial (2.47%). A decrease in weightage for all sectors except residential
(0.82%), and development land and others (0.25) was observed in 2013.

CYF.A9/11.14 22
Property Market in Malaysia
Figure 18: Number of Transactions by State in Malaysia (2012 2013)
(JPPH, 2014).
120000 10

7.07
100000 0

80000 -10
UNITS

60000 -20

%
52,779

40000 49,296 -30

20000 -40

0 -50

2012 2013 % (YOY) 2013 COUNTRY MEAN (% YOY)

Number of transactions
In 2013, Selangor recorded the highest amount of transactions (81,955: 22%) in
Malaysia, followed by Johor (52,779: 14%), and Perak (46,234: 12%). These 3
states made up almost half of the total transactions in Malaysia.

In terms of YOY changes, all states recorded negative growth rates except for
Johor (7.07%), and Perlis (5.93%). The country recorded a decline of -10.85% in
2013.

CYF.A9/11.14 23
Property Market in Malaysia
Figure 19: Turnover Rate of Malaysia Residential Market by State
(2012 & 2013) (JPPH, 2014).
7 1

0.5
6
0.37
0
5
-0.5
TURNOVER (%)

CHANGE (%)
4 -1
3.04
3 -1.5

2.67 -2
2
-2.5
1
-3

0 -3.5

2012 2013 % (YOY) 2013 COUNTRY MEAN (% YOY)

Turnover rate (Residential)

For the year ended 2013, the state of Perak recorded the highest turnover rate in
Malaysia; clocking in at 4.35%, coming in second was Sarawak (4.04%), then
Melaka (3.92%). The bottom 3 states were Labuan (1.60%), Kelantan (2.28%), and
Sabah (2.29%). Johor was at the 11th spot with a turnover rate of 3.04%. The
countrys mean turnover rate was 3.34%.

In terms of YOY changes, Perlis was the highest (0.79%), followed by Johor
(0.37%), and then Pahang (0.22%). The bottom 3 states were Putrajaya (-2.85%),
Kuala Lumpur (-1.71%), and Pulau Pinang (-1.20%). The countrys mean YOY
reading was -0.50%.

CYF.A9/11.14 24
Property Market in Malaysia
Figure 20: Percentage of Unsold Residential Units (New Launches) by State in
Malaysia (2013) (JPPH, 2014).
90 20

80
10
70
-1.14
0
60

CHANGE (%)
UNSOLD (%)

50 -10
43.46
40 -20
42.33
30
-30
20
-40
10

0 -50

TOTAL UNSOLD 2012 TOTAL UNSOLD 2013 % CHANGE (1 YR) COUNTRY MEAN (1 YR)

Unsold units of New launches (Residential)

In 2013, based on individual states; Kelantan recorded the highest percentage of
unsold residential units (new launches) in Malaysia (66.70%), followed by
Terengganu (63.46%), and Sarawak (51.43%). Johor was ranked number 8th
with a collective unsold fraction of 42.33%. The countrys mean reading was
43.90%.

In terms of YOY changes, Sarawak was the highest (11.21%), followed by

Kelantan (10.95%), and then Terengganu (5.35%). The bottom 3 states were
Perlis (-38.62%), Pahang (-8.67%), and Putrajaya (-7.74%). Johor was at the 7th
spot with YOY change of -1.44%. The countrys mean YOY reading was
-3.22%.

CYF.A9/11.14 25
Residential Market in Johor
Figure 21: Weightage of Johor Property Market by Sectors (Volume)
(2013) (JPPH, 2014).
60,000 20.00

10.00
50,000

0.00
NUMBER OF TRANSACTIONS

40,000

CHANGES (%)
-10.00
30,000
-20.00

20,000
-30.00

10,000
-40.00

0 -50.00

SUB-SECTORS JOHOR YOY (%)

Weightage by sectors
Similar to national norm, the residential market made up the bulk of the total
property market transactions in Johor; with a share of 63.76%, followed by
agricultural (19.04%), commercial (9.63%), development land and others (5.26%),
and industrial (2.30%). A shift in weightage from agricultural to residential sector
was witnessed in 2013.

It is worth noting that the weightage of all sectors in Johor was equivalent to the
national average.

YOY, the residential (16.65%) and commercial (9.78%) sectors recorded positive
growth. While agricultural (-13.74%), industrial (-6.76%), and development land
(-2.83%) posted negative growth. Johors average was 7.07%.

CYF.A9/11.14 26
Residential Market in Johor
Figure 22: Number of Residential Transactions by State for Johor (2013)
(JPPH, 2014).
300,000 20.00

15.00
250,000

10.00
NUMBER OF TRANSACTIONS

200,000

CHANGES (%)
5.00

150,000

0.00

100,000
-5.00

50,000
-10.00

0 -15.00
JOHOR MALAYSIA
AREA 2013 YOY (%)

Weightage by area (Residential)

The state of Johor recorded 33,651 residential transactions in 2013. While
Malaysia has a total of 246,225 residential transactions for the same timeframe.
Thus, the state Down South accounted for 13.67% of Malaysias total
residential property market transactions.

In terms of YOY, Johor recorded a positive growth of 16.65% which was in

contrast with the nationals average of -9.70%. This suggests the vibrancy of the
residential property market Down South.

CYF.A9/11.14 27
Residential Market in Johor
Figure 23: Average Price per Transaction of Residential Properties for Johor
(RM) (2013) (JPPH, 2014).
295,000 45.00
292,661

40.00
AVERAGE PRICE PER TRANSACTION (RM IN MILLION)

290,000
35.00

285,000 30.00

CHANGES (%)
25.00
280,000
20.00
275,854
275,000 15.00

10.00
270,000
5.00

265,000 0.00
JOHOR MALAYSIA
AREA 2013 YOY (%)

Average price per transaction (Residential)

Average price per transaction for the residential sector in this southern territory was
slightly lower (-5.74%) than the national average in 2013.

Johor recorded a reading of RM 275,854 (YOY: 39.92%), whereas the country

reading was RM 292,661 (YOY: 17.76%).

Given the favorable conditions, there is high potential for such average price in
Johor to surpass the nation in the near future.

CYF.A9/11.14 28
Residential Market in Johor
Figure 24: Supply Compilation of Residential Properties for Johor (2013)
(JPPH, 2014).
7,000,000 30.00

6,000,000
25.00

5,000,000
NUMBER OF UNITS (SUPPLY0

20.00

SUPPLY RATIO (%)

4,000,000

15.00

3,000,000

10.00
2,000,000

5.00
1,000,000

0 0.00
JOHOR MALAYSIA
AREA
PLANNED SUPPLY (PS) INCOMING SUPPLY (IS) EXISTING STOCK (ES) IS/ES (%) PS/ES (%)

Supply compilation
The total supply of residential properties in Johor was 16.46% of that of the
nation in 2013. This was higher than the residential transacted fraction of
13.67%,, resulting in a lower than average turnover ratio of 3.04% for Johor as
mentioned earlier. To put it simply, the low turnover ratio for Johor was
attributed to a greater increase in supply than demand in 2013.

Incoming and planned supply for Johor were increasing at a faster rate than the
national average. In terms of IS/ES and PS/ES ratios, Johor recorded readings of
16.74% and 23.85% respectively. They were higher than the national readings of
14.76% and 13.05% respectively.

In all instances of supply; which include existing stock, incoming supply, and
planned supply, the state of Johor was growing faster than Malaysia. This was
especially pronounced in the planned supply category. Such figures reinforced
the strong potential and confidence that developers have in Down South.
CYF.A9/11.14 29
Residential Market in Johor
Figure 25: Supply Compilation of Residential Properties for Johor (2013)
(JPPH, 2014).
2.50 12.00

10.00
2.00
8.00

6.00
1.50
YOY CHANGES (%)

YOY CHANGES (%)

4.00

1.00 2.00

0.00
0.50
-2.00

-4.00
0.00
JOHOR MALAYSIA -6.00

-0.50 -8.00
STATE

IS/ES (%) PS/ES (%)

NEWLY LAUNCHED/TOTAL TRANSACTIONS COMPLETED/TOTAL TRANSACTIONS
TOTAL LAUNCHES/TOTAL TRANSACTIONS

Supply compilation (Contd)

Referring to Figure 25, Johors near-term and mid-term supply growth rates
were positive and better than the national average.

When segregating new supply into physical availability, it was observed that
majority of the launches was under construction (50.26%). The weightage for
under construction residential properties has increased, while those newly
launched and completed have decreased. Weightage for not constructed was
stable.

The YOY change for newly launched units per total transactions was negative
(-0.86%). YOY for completed houses per total transactions was negative as
well (-5.69%). While YOY for total launches per total transactions was positive
(5.86%).

CYF.A9/11.14 30
 Residential Market in Johor
Figure 26: Number of Residential Transactions by Price Range for Johor
(Q1 2014) (NAPIC, 2014).
1,600 18.00

1,400 16.00

14.00
1,200
12.00
1,000
NUMBER OF TRANSACTIONS

10.00

WEIGHTAGE (%)
800
8.00
600
6.00
400
4.00

200 2.00

0 0.00
(A) 0 - (B) 50,001 (C) (D) (E) (F) (G) (H) (I) 500,001 (J)
50,000 - 100,000 100,001 - 150,001 - 200,001 - 250,001 - 300,001 - 400,001 - - 1,000,001
150,000 200,000 250,000 300,000 400,000 500,000 1,000,000 - ABOVE
PRICE RANGE (RM)
Q1 2013 Q4 2013 Q1 2014 W (Q1 2013) W (Q4 2013) W (Q1 2014)

Figure 27: Number of Residential Transactions by House Type for Johor

(Q1 2014) (NAPIC, 2014).
3,500 40.00

3,000 35.00
NUMBER OF TRANSACTIONS

30.00
2,500
25.00
2,000
WEIGHTAGE (%)

20.00
1,500
15.00
1,000
10.00
500 5.00

0 0.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 W (Q1 2013) W (Q4 2013) W (Q1 2014)

CYF.A9/11.14 31
Residential Market in Johor
Figure 28: Residential Average Price per Transaction by House Type for Johor
(RM in million) (Q1 2014) (NAPIC, 2014).
0.90 70.00
AVERAGE PRICE PER TRANSACTION (RM IN MILLION)

0.78
0.80
0.72 60.00
0.70
0.60 50.00
0.60
0.48 40.00

CHANGES (%)
0.50
0.38 0.36
0.40 30.00
0.29 0.27
0.30
0.20 20.00
0.20
0.09 0.07 10.00
0.10 0.06
0.00
0.00 0.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 YOY (%) QOQ (%)

Distribution for the value of transactions in Down South was quite balanced; with
highest being RM 300,001 400,000 (14.72%), followed by RM 500,001
1,000,000 (13.45%), and RM 150,001 200,000 (13.28%). Together, they made up
more than 40% of the total residential transactions in Johor. However, there was an
apparent shift in weightage from the lower price range of RM 50,001 200,000, to
the higher price range of RM 300,001 1,000,000 in Q1 2014. However,
transactions above RM 1,000,001 were minimal.

Almost 60% of the total transactions in Johor was in terrace houses (with 2 3
storey being the dominant type). All of the other house types were less than 10%
each. Number of transactions for all strata properties was less than 9%.

Generally, all house types recorded double-digit positive YOY changes for average
price per transaction with 2 - 3 storey semi-detach and townhouses leading the
charge. When compared with QOQ changes, the rate of increment seemed to be
slowing down in the near term.

CYF.A9/11.14 32
Residential Market in Johor
Figure 29: Average Gross Rental Yield of Residential Properties in Johor
(2013) (JPPH, 2014).
16.00

14.40
14.00

12.00
GROSS RENTAL YIELD (%)

10.00

8.00
7.65

6.00

4.00 4.00

2.00

0.00
JOHOR BAHRU (SINGLE STOREY MUAR TOWN (LOW-COST FLATS) BUKIT INDAH@ISKANDAR (SKY
TERRACE) EXECUTIVE SUITES)
AREA

UPPER CASE (%) LOWER CASE (%) AVERAGE (%)

Gross Rental Yield

The average gross rental yields for Johor Bahru, Muar Town, and Bukit Indah
were quite satisfactory according to their respective house types.

Single storey terrace houses in Johor Bahru recorded an average gross rental
yield of 4.00%, while low-cost flats in Muar Town posted 7.65%. Luxury
condominiums at Bukit Indah@Iskandar has an expected average gross rental
yield of 14.40%.

CYF.A9/11.14 33
Residential Market in JB
Figure 30: Number of Residential Transactions by House Type in JB
(Q1 2014) (NAPIC, 2014).
2,500 50.00
45.00
NUMBER OF TRANSACTIONS

2,000 40.00
35.00
1,500 30.00

WEIGHTAGE (%)
25.00
1,000 20.00
15.00
500 10.00
5.00
0 0.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 W (Q1 2013) W (Q4 2013) W (Q1 2014)

Figure 31: Residential Average Price per Transaction by House Type in JB

(RM in million) (Q1 2014) (NAPIC, 2014).
1.20 1.09 1.11 120.00
AVERAGE PRICE PER TRANSACTION (RM IN MILLION)

0.99
1.00 100.00
0.75 80.00
0.80
0.65
60.00
0.60
CHANGES (%)

0.41 0.40 40.00

0.40 0.28
0.24 20.00
0.20 0.08 0.09 0.06 0.00
0.00
0.00 -20.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 YOY (%) QOQ (%)

CYF.A9/11.14 34
Residential Market in JB
In this finale, the number of transactions for Down South will be further broken
down into two components; namely JB district and Johor ex. JB.

JB
In the district of JB alone, the total residential transactions in Q1 2014 accounted
for 55% of the overall Johor state.

The most preferred house type in JB was 2 - 3 storey terrace houses which made up
close to 45% of the total transactions in Q1 2014. This was followed by single
storey terrace houses which represents 18% of the total transactions.
Condominiums and apartments were third with 10%. Number of transactions for all
strata properties was capped at 14%. This was significantly lower than those in
Klang Valley and Penang.

Generally, almost all house types recorded double-digit positive YOY changes for
average price per transactions (except for flats and low-cost houses). Some of the
biggest advancers were townhouses and low-cost flats. The rate of increment in
QOQ seemed to be slowing down compared to YOY.

CYF.A9/11.14 35
 Residential Market in Johor ex. JB
Figure 32: Number of Residential Transactions by House Type in Johor ex. JB
(Q1 2014) (NAPIC, 2014).
1,400 40.00
35.00
NUMBER OF TRANSACTIONS

1,200
30.00
1,000
25.00
800

WEIGHTAGE (%)
20.00
600
15.00
400
10.00
200 5.00
0 0.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 W (Q1 2013) W (Q4 2013) W (Q1 2014)

Figure 33: Residential Average Price per Transaction by House Type in

Johor ex. JB (RM in million) (Q1 2014) (NAPIC, 2014).
0.60 80.00
AVERAGE PRICE PER TRANSACTION (RM IN MILLION)

0.48 60.00
0.50 0.45
40.00
0.40
0.29 20.00
CHANGES (%)

0.30 0.26 0.27

0.00
0.20 0.18
0.16
0.14 0.12 -20.00
0.11
0.10 0.06 -40.00
0.03
0.00
0.00 -60.00

HOUSE TYPE

Q1 2013 Q4 2013 Q1 2014 YOY (%) QOQ (%)

CYF.A9/11.14 36
Residential Market in Johor ex. JB

Johor ex. JB
Whereas the rest of Johor excluding the district of JB only account for 45% of
the overall Johor state in Q1 2014.

In Johor ex. JB, single storey terrace houses accounted for almost 32% of the
total transactions in Q1 2014. This was followed by 2 3 storey terrace houses
(23%) and vacant plots (16%). Demand for strata properties was muted at 2%.

YOY changes for average price per transactions were positive for all properties
(except for condominiums and apartments, townhouses, and low-cost flats).
Some of the biggest advancers were cluster houses, and flats.

QOQ, all properties recorded positive growth as well (except for townhouses and
low-cost flats). Leading advancers include flats and detach houses. The rate of
increment for QOQ seemed to be consolidating compared to YOY.

CYF.A9/11.14 37
References
Department of Statistics Malaysia. (2014) Statistical Releases, [Online],
Available: http://www.statistics.gov.my/portal/index.php?option=
com_content&view=article&id=472&Itemid=111&lang=en&negeri=Malaysia
[11 Dec 2014].

JPPH. (2014) Property Market Report 2013, Putrajaya: Valuation and Property
Services Department.

NAPIC. (2014) Key Statistics, [Online], Available:

http://napic.jpph.gov.my/portal [11 Dec 2014].

CYF.A9/11.14 38
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CYF.A9/11.14 40
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