China Solutions

Seizing the Opportunity: Unlocking Johor’s Real Estate Potential with the JB-SG Rapid Transit Link

March 24, 2024

An estimated 350,000 people traverse the Causeway every day, making the Singapore-Malaysia border one of the world’s busiest land crossings. But this sheer amount of commuters has led to a distressing, longstanding issue: severe traffic jams.  

Queues to clear customs on both sides can sometimes take up to five hours – even longer than a flight from Singapore to Hong Kong. The chronic congestion is a key reason why Johor Bahru’s (JB) real-estate aspirations have yet to fully take off, despite the country’s ambitious Iskandar Malaysia project that looked to be a magnet for property investments in the area.

Indeed, the state of Johor has the highest number of unsold homes in Malaysia, with over 6,000 empty units worth an estimated S$1.4 billion.

“JB has always failed to achieve its full potential because of this (congestion issue),” said Mr. Ryan Khoo, Director and Co-Founder of real estate investment consultancy Alpha Marketing.

But its property potential may finally be unlocked with the construction of the new Johor Bahru-Singapore Rapid Transit System (RTS) link. Slated to launch in 2026, the newfound convenience of the RTS will allow commuters to travel between the Bukit Chagar station in Johor Bahru and the Woodlands North station within six minutes.  With the ability to serve 10,000 passengers every hour in each direction, this could also signal a golden opportunity for Johor’s real-estate scene.

Instead of agonising jams lasting hours, travel time from Johor to Bayfront MRT will be cut to just one hour, leading Mr. Khoo to coin another witty name for the RTS: the Road To Singapore.  

“Consider the impact on the JB real estate market when this happens. Once we improve connectivity, it can only get better,” he said on the final day of the Southeast Asia Property Investment Show (SEAPIS) organised by PropertyGuru. The two-day event saw industry leaders and analysts gather to share how investors can benefit from opportunities in the region’s property market.

At the Sands Expo and Convention Centre, he urged the audience to be early movers on this exciting prospect. “It’s a very good opportunity,” he said. “Prices are cheap, there’s very little new supply (of property units) and the RTS is coming.”

The Power of a Metro Line

For Singaporeans looking to become property investors, the housing options that JB offers are affordable alternatives compared to the sky-high prices seen on the island-state. Mr. Khoo noted that a condominium unit in the Woodlands area costs about S$1,056 psf, while just 15km away, the price plummets to around $300 psf in JB’s city centre.

Acknowledging that there have been stories on Singaporeans getting their fingers burnt in the Malaysian property market, he emphasized that the RTS will be a definite game-changer.

Indeed, he expects the newfound connection to raise property prices in JB, making it along-term investment worth considering now. “Even if it goes up to just $500psf, it’s already a big percentage profit,” he said. “You can make money in Malaysian real estate.”

To illustrate the impact that RTS will have on JB’s real-estate potential, he referred to the Chinese city of Shenzhen as a case study. A metro connection to the financial hub of Hong Kong back in the 80s was crucial in its transformation from a fishery village to global metropolis. “Shenzhen developed, and its property prices increased,” he said.

Present Trends, Future Outcomes

For an indication of how JB’s property prices may fare once the RTS is fully operational, Mr. Khoo also pointed potential investors to a current trend: heightened demand for rental rooms in the city.

Singapore’s all-time high rental rates have spilt over to the Johor property market. More Malaysians working in Singapore are increasingly looking back home for a more affordable housing option. The increased demand for property in JB has in turn raised rental prices, with a room going for S$220 a month as of 2022 – compared to S$105 when borders were closed. “The more expensive Singapore is, the better it is for JB property owners”, he said.

And now that borders are fully reopened, Mr. Khoo noted there is also one more attractive prospect that might drive more Singaporeans towards JB: a more affordable lifestyle. “The cost of living in Singapore is 136 per cent more expensive than JB,” he said. “A cheaper cost of living can drive people to stay in JB.” With the RTS, relocating to Johor, while still making frequent trips back to Singapore, will be a more accessible reality.

But for some Singaporeans, buying a foreign property is not all about the capital returns. “Singapore is too stressful,” said Mr. Mohd Andi, a fitness instructor who was among the audience. “So, if you have a place to get away from this rushed life, it’ll be good as well.”

Note: Article content was written based on the speaker’s insights from Southeast Asia Property Investment Show (SEAPIS) event which was held on 25-26 March 2023.

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