RTS and Revised MM2H Bring Optimism for Johor’s Property Market
Johor’s property overhang has often made headlines for the large volume of unsold houses and condominiums, having been crippled by the pandemic and tighter regulations on foreign homebuyers.
However, there is now a renewed sense of optimism brought on by external factors. Johor’s property market is already seeing keen interest from Singaporeans and the recently announced revision to the MM2H criteria is expected to further boost interest from foreign buyers.
Drawn to the construction of Rapid Transit System (RTS)
Singaporean investors are increasingly flocking to Johor real estate thanks to the the ongoing construction of the Rapid Transit System (RTS) link between Singapore and Malaysia. This surge is also notably attributed to the Singaporean government's decision to raise the additional buyer's stamp duty, making it more expensive to own multiple properties.
According to a report by The Straits Times, Singaporeans account for 40% of buyers for the Princess Cove condominium in Johor Baru, a development by Chinese property developer R&F.
R&F's deputy general manager, Xu Jie, told The Straits Times that property prices could be expected to rise closer to the completion of the RTS link. The remaining buyers for Princess Cove come from Malaysia, China, and Taiwan, although specific figures were not disclosed.
Sales of properties in Johor have seen a significant uptick, particularly between April and September, with a reported fivefold increase compared to the same period the previous year. This surge followed the reopening of the borders between Singapore and Malaysia, which had been closed due to the Covid-19 pandemic.
Xu attributes the increased interest from Singaporean buyers to the proximity of Princess Cove to the Johor Baru checkpoint, which is less than a 10-minute walk away. The RTS link, currently over 50% completed as of November, is slated for completion by 2026.
Added Boost Expected with Relaxed MM2H Criteria
On December 16, 2023, Datuk Seri Tiong King Sing, the Minister of Tourism, Arts, and Culture, announced significant changes to the Malaysia My Second Home (MM2H) program, introducing three new categories. This adjustment reflects a broadening of eligibility criteria and a restructuring of the program's offerings.
The revised system brings various modifications to eligibility criteria, notably reducing the minimum age requirement to 30 years. This change opens up opportunities for a more diverse group of individuals looking to make Malaysia their second home.
An important change involves an expanded list of qualifying dependents. Beyond spouses, children below 21, and children with disabilities, the program now includes individuals aged between 21 and 34 who are neither employed in Malaysia nor married. Furthermore, parents and parents-in-law are now recognised as eligible dependents under the updated system.
To enhance efficiency and security, applications must now be exclusively submitted through licensed MM2H agents authorised by the Ministry under the Tourism Industry Act 1992.
The MM2H program now features Platinum, Gold, and Silver categories, each with its specific requirements. To read more about the requirements under each category, check out our previous article here.
The MM2H program was reinstated on August 11, 2021, after a one-year hiatus due to the Covid-19 pandemic, introduced more stringent terms, including a minimum 90-day stay requirement, a monthly offshore income of at least RM40,000, and a fixed deposit account with a minimum balance of RM1 million.
These conditions, criticised for their stringency, resulted in a significant decline in MM2H applicants. The recent revisions aim to make the program more inclusive and flexible, providing renewed hope for Johor’s property market where a bulk of unsold properties are dependent on the prospect of foreign buyers.
Reducing Johor’s Property Overhang
In a previous report by Sinar Harian in November 2023, Johor's housing and local government committee chairman, Jafni Shukor, expressed confidence in resolving the state's property glut issue within three years.
Despite having 6,040 unsold property units in the previous year's second quarter, the number decreased to 4,717 units by the first half of the current year.
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