The COVID-19 outbreak in Malaysia has caused an unprecedented disruption to the international property market as the number of positive cases continues to increase to new heights, it is expected to have a profound impact not only on tourism, services, and manufacturing industry; but also on the property industry. The Johor skyline is now dotted with empty condominium units, due to an oversupply in the market and lack of foreign buyers.
JOHOR BAHRU: When Singapore business owner Jonathan Gan purchased a four-room condominium at Lovell Country Garden in 2018, he thought he had clinched his dream retirement home. The freehold apartment located near Johor Bahru’s city centre was twice the size of his three-room HDB flat in Singapore, but the cost was only half of the latter when he bought it directly from the developers.
“The best thing about the unit is the amazing view. You never get anything close to it at such value in Singapore,” added the 42-year-old, who lives with his wife and two daughters. The apartment, like most units in the Lovell development, overlooks the Straits of Johor. The balcony opens up to a picturesque sea view and there is a sandy beach below. “It was the ideal weekend home,” said Gan. “But now it’s becoming a bugbear.”
Just three years after he purchased it, Gan, who bought the unit at around RM1 million (US$242,000), is having a hard time trying to sell it, even though the asking price is a fraction of what he paid for it.Since the COVID-19 pandemic hit last year, border closures between Singapore and Malaysia meant that he and his family could not visit his weekend home. Furthermore, Gan’s business in Singapore has been affected by the pandemic, and he now needs to sell the apartment to gain some liquidity.
Gan is among property owners in Johor Bahru who are having issues trying to sell their properties, as the market is in the doldrums due to the prolonged effects of COVID-19.Condominium developments around Johor Bahru were built with foreign buyers in mind, but the pandemic has closed borders, leaving many of them empty. Units owned by those from China, Singapore, Hong Kong have been left unoccupied while homes that were left unsold have stayed empty.
With borders remaining shut in the short term, the situation seems especially bleak for those desperate to sell their homes like Gan, who cannot find a buyer despite lowering his asking price for his four-room apartment at Lovell Country Garden. Landed property is also facing potential depreciation. Besides condominiums and serviced apartments, those with landed properties in the southern state are also concerned about depreciating values.