The potential for Iskandar, and the extended Johor Bahru, region remains strong. But the lack of progress on transportation issues for getting back and forth from Singapore are a huge problem for anyone wanting to think about living in the area now. I also remain worried about the huge imbalance between a huge boom in luxury condo development and the lack of a similar visible increase in high paying jobs to afford the huge numbers of luxury condos coming on the market now, and over the next 5 years.
The imbalance between office buildings and the huge numbers of luxury condo high rises continues to be a big warning sign I think. Add to that the very poor job done thus far dealing with the very initial stage of what will soon be a flood of cross border traffic is a huge warning sign that investors should heed.
The cooling measures on real estate investment were wise, though late (I would have done it a bit differently but overall taking cooling measure was, and is, a good idea).
There needs to have been more done sooner on the cross border transportation issues – a 3rd link should have been operational last year. The MRT should be under construction now. And more focus should be on bringing in high paying jobs to fill office buildings and then getting those built.
Without much more progress on transportation and many more high paying office jobs the current number of luxury condo buildings should not have been allowed. The efforts on health care and education and the good jobs they provide, as part of the Iskandar initiative, have been good but those jobs don’t come remotely close to justifying even a small fraction of the luxury condo units under construction.
Several new big hotels are a good boost for the economy (and are great tax revenue sources). Retail efforts are good (and also good for providing lots of jobs and tax revenue) but how much more can be expected there without better paying jobs elsewhere in the local economy (basically I think this is a good focus but I think everything that can be hoped for is being done)? Theme parks are a good hope for bringing in tourists and boosting the economy (and filling up those hotels and bringing in tax revenue and providing jobs). It seems to me the very bad transportation problems over the last year in moving between Singapore and JB are a big problem for investors in this area though (if I were such an investor I wouldn’t commit more investments until the situation was much improved and there was reason to believe it wouldn’t be allowed to fall back into the situation we have been living with now). The manufacturing efforts have been decent but are not very significant thus far in producing high paying jobs.
One example of a mistake that is going to cause problems for decades is failing to install fiber in brand new luxury condo buildings. Even if developers don’t want to invest in the future I would not have approved building plans for luxury condos after 2010 that did not include wiring every unit for fiber. Fiber is the future of high tech living and not investing in it is not the way to become known as a future focused location. Economic development requires thinking of the future and not allowing shortcuts and cheap solutions today from capping the potential for the future.
The potential for Iskandar remains as strong as it is for almost any region on the globe. But the next 10 years can build a solid foundation for long term success or can result in a system that is difficult to build upon (such as a huge imbalance in real estate, toward luxury condos for example, or a bad transportation system – which are hugely costly to deal with). The next 10 years is much more challenging to do well than the last 10 years – the begging was very easy by comparison to the challenges faced now. If it is done well, I can see the Iskandar/JB region paired with Singapore in creating one of the most vibrant areas on the globe and creating great jobs and lives for those living here (Singapore will also benefit greatly from this being done well).
Related: Iskandar Housing Real Estate Investment Considerations (2011) – Minimum Housing Prices for Foreigners Investing In Malaysia Rise to RM 1,000,000 – The Potential of Iskandar is Very High but Investing in Iskandar has Risks (2011)