Johor property glut prompts Govt to warn buyers of risks

SINGAPORE — In Johor alone, there are around 336,000 new private residential units in the pipeline — more than the total number of private homes  in Singapore.

And this does not include the 1,400ha of reclaimed land near the Tuas Second Link, which will be developed from 2020 onwards.

In the light of rising concerns about this oversupply of private properties across the Causeway, the Singapore Government will ramp up efforts to raise awareness of the risks involved in buying overseas property.

“Given these indications, buyers are becoming more cautious, as shown by many reports,” Minister for Culture, Community and Youth Lawrence Wong said in Parliament today (May 11), in his capacity as a member of the Monetary Authority of Singapore’s (MAS) board of directors.

“Official Malaysian data suggest the Johor housing market is already slowing down ... Singaporean buyers, too, are becoming wary.”

According to a survey of real estate agencies, the number of Malaysian properties bought through these agencies dropped from 2,609 in 2013 to 838 last year, said Mr Wong, who was replying a query by Member of Parliament Lee Bee Wah (Nee Soon GRC).

Her question on how many Singaporeans are individual owners of properties in Iskandar Malaysia comes after a recent Maybank report cautioned investors that the glut of homes in Iskandar will be aggravated by a huge incoming supply this year and next.

The report pointed the finger at aggressive land-banking activities by Chinese developers, which could worsen the glut and lead to price wars in the high-rise mixed-development segment.

Data from Malaysia’s National Property Information Centre, which Mr Wong had cited, also show that the number of upcoming planned properties in Johor is the highest in the country.

In response to Dr Lee’s question on how Singapore’s banks are safeguarded against any major default in property loans to buyers, Mr Wong said that the banks are careful about financing overseas property purchases.

Such loans make up 2 per cent of housing loan portfolios of the key mortgage lenders in Singapore, he said, noting that banks are required to assess customers’ debt servicing ability for all new property loans, whether or not the property is here or overseas.

As to Dr Lee’s query on whether the Additional Buyers’ Stamp Duty would be reviewed or lifted to make Singapore properties more affordable, Mr Wong said the Government’s cooling measures will take into account both global property trends and the domestic market.

The Consumers Association of Singapore said last week it had received several complaints from consumers who bought properties overseas, and called for the authorities to review how foreign developers disclose information to buyers, particularly in advertisements.

And by year end, new guidelines, from the Advertising Standards Authority of Singapore, for advertisements pertaining to investments in financial instruments and property, including foreign properties, could be implemented.