Iskandar Malaysia developments continue to gain worldwide attention as individuals, businesses and investments try to ride on the progress in the region (Source: Iskandar Malaysia Project).

is1

Due to the close proximity and the relative commuting convenience, many Singaporeans are attracted to these developments.

Projects such as Horizon Hills, Puteri Harbour, Nusajaya and Austin Hills offer a lifestyle that Singaporeans can only dream off (ample of space, golf memberships, cars), at a fraction of the price. (Source: Investment Week Singapore)

is2

Coupled with the strong Singapore Dollar in the region ($1SGD = $2.62RM) and the relatively low cost of living in Malaysia (cheaper cars and petrol), Singaporeans in the middle income bracket can truly  live like ‘a king’ in Malaysia.

However before you decide to take your plunge in the Iskandar region, take heed of these cautionary tales.

  • Untested resale value

The way we look at it, the Iskandar region is suited more for retirees and not for those looking for a quick flip.

If you are expecting to buy the units for less and sell it within a year for a decent profit, you might be heading for a fall (Source: Money Smart)

There are just not enough data to determine the resale value of those units in the Iskandar region. Everything that you act upon now will be based on pure speculations.

  • Fluctuations in Ringgit

The Ringgit fluctuates on a daily basis. This time last year, it was $1SGD = $2.55RM. Today it’s $1SGD = $2.65RM.

You can have the lavish lifestyle in Malaysia because of the weak Malaysian Ringgit against the Singapore Dollar. But that also means that the value of your property is depended on how the Ringgit is doing. Your profits from selling the unit might be lost in the differences of the exchange rate.

Again. Another gamble.

  • Don’t sell your home in Singapore.

Buying an affordable public housing (i.e HDB) in Singapore is the right of every Singaporean. The value of your home is guranteed by the Singapore Government and its value can only appreciate over time.

Do not give up this right no matter what. Instead, make use of the opportunity

At the very least, It can also give you passive income (i.e rental) as you enjoy your life style in the Iskandar region. It also acts as leverage in the event the Iskandar region stutters.

  • Do not compare it with Singapore prices.

The number one rookie mistake of all time.

Always compare apples with apples. There is no point comparing a bungalow in the Iskandar Region with a bungalow in Singapore.

They may look the same, but they are prices apart.

Compare the bungalow in the Iskandar region with another Bungalow in a similar development. That way, you can better see the resale value, the appreciation rate and the price of the land. In essence, you can have a better sense if you have overpaid for the unit.

Do also take note of the hidden taxes and levies  for the foreign buyers.

After you include in all the hidden cost, your home in the Iskandar region may actually cost you much much more that what was advertised.

isk3

The Iskandar region is great. Malaysia is a beautiful country. But the HDB house is my way of staking a claim in making Singapore my home

I will think deep and long about the properties in the Iskandar region.

Share the caution.

Source: Money Smart