Is Johor Bahru property becoming overbuilt?

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Is Johor Bahru property actually becoming overbuilt now?

Johor Bahru is already overbuilt in serviced apartments, and the risk is now spreading through a high-rise pipeline that remains much larger than proven demand.

The latest NAPIC market-status data make the problem hard to dismiss. Johor has 9,972 completed but unsold serviced apartments, almost 52% of Malaysia's entire 19,263-unit serviced-apartment overhang. At the same time, Johor has another 3,852 completed but unsold conventional residential properties.

Yet those numbers do not describe every part of Johor Bahru equally. Landed homes in established neighbourhoods, owner-occupied housing and genuinely convenient properties around major transport links have much deeper demand than generic investor towers.

The construction mix is what worries us most. Olive Tree Property Consultants counted 70,177 high-rise units in Johor's future supply at the end of 2025, compared with 38,448 landed homes. About 65% of that combined pipeline is therefore high-rise, even though high-rise serviced apartments are already where the biggest unsold inventory has accumulated.

Johor Bahru still has plenty of demand. Johor was Malaysia's second-largest residential market by transaction volume in 2025, Singapore connectivity is improving, and major investment is flowing into the Johor-Singapore Special Economic Zone. Those forces can support a lot of development.

For now, though, they have not erased the excess stock already sitting on the market.

Measure	Latest reading	Johor's position	What we take from it
Completed unsold serviced apartments	9,972	Highest in Malaysia	Clear excess supply
Share of Malaysian serviced-apartment overhang	≈52%	Exceptional concentration	Problem is heavily Johor-weighted
Completed unsold conventional residential units	3,852	Second-highest state total	Broader pressure exists too
Future high-rise supply	70,177	65% of high-rise + landed pipeline	Competition is still growing
Future landed supply	38,448	35% of pipeline	Overbuilding is much less concentrated here

How can Johor Bahru prices still rise if there are too many properties?

Johor Bahru prices can keep rising while oversupply gets worse because buyers are concentrating on better properties while weaker stock simply sits unsold.

This is one reason the market can look healthier than it really is.

Olive Tree's Johor Bahru monitoring found residential prices generally rising through late 2025, with serviced apartments among the strongest performers as new launches and investor interest pushed prices higher. Johor also outperformed several other major Malaysian markets during that period.

There is nothing contradictory about that.

A median transaction price only measures homes that actually sold. A serviced apartment that has been completed for two years without finding a buyer does not drag down the median because no transaction happened.

New launches can also pull averages higher. Imagine an older apartment struggling to sell at RM400,000 while a new development nearby successfully sells units at RM700,000. The recorded market can show higher prices even though the older building has become harder to exit.

Developers have another advantage over individual sellers: they can bundle furnishings, absorb legal fees, structure payment plans and mobilise large agency networks without openly cutting the headline SPA price.

So we would be much more worried by rising unsold inventory than reassured by a rising citywide median. In Johor Bahru today, both are happening at the same time.

How bad is Johor's serviced-apartment glut?

Johor's serviced-apartment glut is severe enough that we should treat oversupply as an existing problem, rather than something that might appear after the next construction cycle.

NAPIC currently counts 19,263 completed but unsold serviced apartments across Malaysia, worth RM16.52 billion. Johor alone holds 9,972 of them. Kuala Lumpur has 4,181 and Selangor 2,407.

Johor therefore has more completed-unsold serviced apartments than Kuala Lumpur and Selangor combined.

The price distribution makes this particularly relevant to current Johor Bahru buyers. Across Malaysia, 58.5% of completed-unsold serviced apartments are priced between RM500,001 and RM1 million.

That is precisely the range occupied by a large share of investor-oriented Johor Bahru developments.

The stock is also available now. Buyers considering a RM700,000 new serviced apartment are competing indirectly with thousands of completed units whose owners or developers may be much more motivated to negotiate.

There is an additional wrinkle. Recent JPPH transaction records compiled from actual sales put the median transacted price for Johor high-rise homes at roughly RM360,000 over the latest 12-month window, with half of recorded high-rise transactions between about RM205,000 and RM520,000.

That creates a sizeable gap between many new-launch prices and the resale alternatives buyers can already purchase.

A new project can deserve a premium for location, specifications or future infrastructure. The market currently contains enough cheaper stock, though, that the premium has to earn its keep.

Market	Completed unsold serviced apartments	Approx. national share
Johor	9,972	51.8%
Kuala Lumpur	4,181	21.7%
Selangor	2,407	12.5%
Rest of Malaysia	2,703	14.0%
Malaysia	19,263	100%

Is Johor still building too many condos?

Johor is still building enough high-rise property to make today's oversupply harder to clear.

The future-supply mix gives us the clearest answer. Olive Tree Property Consultants counted 70,177 future high-rise units in Johor against 38,448 landed homes at the end of 2025.

That works out to roughly 1.8 future high-rise units for every landed home.

This is an uncomfortable mix because the existing inventory problem is already concentrated in serviced apartments and other investor-friendly high-rise products. Developers have not responded to years of high-rise overhang by moving decisively away from the segment.

There are perfectly sensible reasons for individual projects to go vertical. Central land is expensive. Density makes sense near transport. Condominiums are easier to package for investors and foreign buyers. One site can also deliver several hundred homes.

The problem appears when many developers make the same reasonable decision at once.

A 500-unit tower can sell well in isolation. Ten projects targeting similar buyers and completing within a few years create a completely different market.

Forest City remains the extreme Johor example of what can happen when physical development gets far ahead of actual occupation. Central Johor Bahru has much stronger fundamentals than Forest City ever had, so we would not equate the two markets. The useful lesson is simpler: Johor has repeatedly shown that developers can create housing much faster than households appear to fill it.

Future Johor supply	Units	Share
High-rise	70,177	64.6%
Landed	38,448	35.4%
Combined	108,625	100%
High-rise units per landed unit	≈1.8x	—

Are enough people actually buying Johor property to absorb the supply?

Johor has a lot of genuine property demand, but current buying activity has not been enough to clear the stock developers already produced.

Johor recorded 42,566 residential transactions in 2025, according to NAPIC. That was 16.6% of all residential transactions in Malaysia and made Johor the country's second-largest residential market by volume.

The transactions were worth RM20.94 billion.

Those are big numbers. They are one reason we should avoid treating Johor Bahru like a deserted speculative development with no real buyers.

The problem becomes clearer when we look at what remained unsold despite all that activity. Johor still entered the latest reported period with thousands of completed conventional homes and serviced apartments waiting for buyers.

Development activity has hardly stopped either. Johor recorded 2,693 newly launched residential units in the latest NAPIC quarter, the highest launch volume among Malaysian states.

Nationally, only 11.5% of newly launched residential units were reported sold during that quarter. That number covers Malaysia rather than Johor alone, so we should not pretend it is a Johor absorption rate. It does show that developers are currently launching into a market where immediate take-up is far from automatic.

The picture is unusual but pretty clear: Johor has strong demand and excessive supply at the same time.

Demand would have to accelerate considerably from here to make project selection unimportant again.

Is Johor Bahru's resale market deep enough for all these condo investors?

Johor Bahru has an active resale market, but owners of ordinary high-rise units now face enough competing stock that a quick, profitable exit cannot be taken for granted.

Current JPPH-based transaction records show thousands of Johor high-rise sales over the latest 12-month period, so resale liquidity certainly exists.

The more revealing figure is the price. The median transacted Johor high-rise property is currently around RM360,000, and roughly half of recorded sales fall between RM205,000 and RM520,000.

Now compare that with new serviced apartments marketed at RM600,000, RM700,000, RM800,000 or more.

A buyer paying that premium today eventually has to convince another buyer that the newer building, better location or infrastructure advantage is worth hundreds of thousands of ringgit more than the alternatives already trading in the secondary market.

The resale owner also loses several advantages the original developer had. There is no launch showroom, huge advertising campaign or network of agents being paid to move hundreds of units. The owner may be competing against neighbouring sellers with the same floor plan, the same view and a more urgent need for cash.

This is where developer sales figures can fool investors. Selling a condominium when it launches and reselling the same condominium five years later are two different exercises.

For a generic JB high-rise, we would currently treat resale liquidity as one of the main risks rather than an afterthought.

Can Johor Bahru rents support all these new condos?

Johor Bahru has enough rental demand to support good projects, but rental demand is unlikely to protect every investor once another large batch of similar apartments reaches the market.

Cross-border workers give JB something many Malaysian cities do not have: a tenant can earn Singapore-linked income while paying Malaysian housing costs. Local employment, students, medical demand and the wider Johor economy add other tenant groups.

That makes the rental story real.

The danger is price.

A unit generating RM3,000 a month produces a 6% gross yield if it costs RM600,000. The same RM3,000 rent produces 4.5% at an RM800,000 purchase price. At RM1 million, even RM3,500 a month only gives 4.2% gross.

Maintenance fees, sinking fund contributions, vacancy, furnishing, agent fees, repairs, assessment and financing all come after that.

New completions create another problem. When a 600-unit investor-heavy building receives vacant possession, dozens or even hundreds of owners can start looking for tenants at roughly the same time. They often own similar one- and two-bedroom layouts.

One landlord asks RM3,000. Another accepts RM2,800 rather than lose a month of rent. Someone with a mortgage due accepts RM2,600.

Rental demand can be growing while rents inside one building fall.

So the useful question for a JB investor today is not simply whether tenants exist. We want to know how many similar units will be chasing those tenants when the building completes.

Purchase price	Monthly rent	Annual gross rent	Gross yield
RM500,000	RM2,500	RM30,000	6.0%
RM600,000	RM3,000	RM36,000	6.0%
RM700,000	RM3,000	RM36,000	5.1%
RM800,000	RM3,000	RM36,000	4.5%
RM1,000,000	RM3,500	RM42,000	4.2%

Will the Johor Bahru RTS Link absorb the condo oversupply?

The RTS Link should create a powerful pocket of housing demand around Bukit Chagar, but expecting one railway to absorb Johor Bahru's wider condo surplus goes much too far.

Malaysia's Ministry of Transport describes the RTS Link as a roughly four-kilometre connection between Bukit Chagar beside JB Sentral and Woodlands North in Singapore.

Its planned peak capacity is up to 10,000 passengers an hour in each direction.

For someone working in Singapore, that changes the practical calculation of living in Johor Bahru. A predictable rail journey is far more attractive than structuring daily life around Causeway road congestion.

We therefore expect truly walkable RTS properties to gain a durable advantage.

The word "truly" matters.

A condominium beside Bukit Chagar and one that requires a 20- or 30-minute drive to reach the station do not receive the same benefit. Yet today's property marketing stretches the RTS story across a surprisingly large part of Johor Bahru.

Most RTS passengers will not become new condo tenants either. Some already live in Johor. Some live in landed homes. Others will reach the station from farther away. Plenty will travel occasionally rather than commute five days a week.

The RTS can improve central JB dramatically without fixing oversupply everywhere else.

In fact, better transport may sharpen the difference between properties. Once tenants can choose among thousands of units, genuine walking convenience becomes much easier to value.

Can the Johor-Singapore SEZ create enough demand for all these homes?

The Johor-Singapore Special Economic Zone can bring thousands of additional workers and households into Johor, but the scale of planned housing still outruns the SEZ's direct job targets by a wide margin.

The JS-SEZ is a serious economic project. It covers Johor Bahru, Iskandar Puteri, Pasir Gudang, Kulai, Pontian and Pengerang, with sectors ranging from manufacturing and logistics to digital services, finance, healthcare and tourism.

The government has targeted 100 projects over ten years and about 20,000 highly skilled jobs.

Twenty thousand skilled jobs would be meaningful for housing demand. Those workers also support secondary employment in restaurants, retail, transport, education and other services, so the eventual housing effect should be larger than the direct job count.

Even so, the numbers help keep expectations grounded.

Johor's identified future high-rise supply is more than three times that 20,000-job target. The comparison is imperfect because projects complete at different times, households can contain several workers, and the SEZ will generate indirect jobs. Still, it shows how much economic growth is already being assumed by the property pipeline.

Johor Bahru's population gives us a similar reality check. The latest district estimate available from the Department of Statistics puts Johor Bahru at roughly 1.8 million people, with annual growth of less than 1%.

A city that size can absorb plenty of housing over time. It cannot automatically absorb tens of thousands of investor apartments simply because developers build them.

The SEZ improves the demand case considerably. It does not give every new condo a tenant.

Are the best Johor Bahru locations escaping the oversupply?

Prime Johor Bahru locations are already separating themselves from generic high-rise stock, and we expect that gap to get wider as buyers gain more choice.

Central JB around Bukit Chagar, JB Sentral and the CIQ has a very obvious reason for people to live there. The transport advantage cannot easily be recreated somewhere else.

Other areas have different strengths. Mount Austin has a mature commercial and lifestyle base. Tebrau has established local demand. Iskandar Puteri combines education, offices, leisure and access toward the Second Link. Mature landed townships attract families for reasons that have little to do with short-term investment narratives.

A project with one of those demand engines has some defence against oversupply.

A project sold mainly on "Johor is booming" has much less.

This distinction is becoming more important lately because buyers have so many alternatives. In a tight market, an average development can rise with everything else. In a crowded market, tenants and resale buyers can become fussy about walking distance, management quality, maintenance fees, density, layout and actual neighbourhood convenience.

We would therefore expect Johor Bahru's overbuilding to produce a wider performance gap rather than an identical price decline across the city.

Some buildings may do very well while another tower ten minutes away barely moves.

Are Johor Bahru landed homes overbuilt too?

Johor Bahru's landed market looks much healthier than its serviced-apartment market, so calling all Johor housing overbuilt would stretch the evidence too far.

Johor does have 3,852 completed but unsold conventional residential units, the second-highest state total in Malaysia. Some landed developments can certainly struggle, particularly when they are remote or compete with several similar townships.

But the scale and buyer profile differ sharply from serviced apartments.

Landed homes make up only about 35% of Johor's identified landed-plus-high-rise future pipeline. They are also bought more often by families and owner-occupiers who care about schools, neighbourhoods, commuting and space.

High-rise investor stock is easier to reproduce. A developer can put hundreds or thousands of similar apartments onto relatively little land.

Established landed neighbourhoods have a more natural physical constraint.

This explains why Johor's headline oversupply statistics need to be used carefully. A buyer considering a terrace house in a mature township should pay attention to nearby landed supply and local transactions. Quoting the state's huge serviced-apartment glut as if it directly measures that house would tell us very little.

The current evidence points most strongly toward excessive investor-oriented high-rise supply.

Is Johor's oversupply problem getting better yet?

Johor's oversupply problem has not given us enough evidence of a durable turnaround yet, especially when the wider Malaysian overhang is still moving in the wrong direction.

NAPIC's latest residential data show Malaysia with 32,801 completed but unsold conventional homes.

That figure was up 7.6% from the previous quarter and roughly 39.5% from a year earlier. It was also the sixth consecutive quarterly increase.

The value of the overhang moved differently: the total value fell 7.7% during the quarter even as the number of units rose.

That is an interesting development. More properties are getting stuck, but the extra stock is increasingly coming from cheaper units rather than simply from very expensive homes.

Serviced apartments have not cleared either. National completed-unsold inventory increased from 18,752 to 19,263 units between the two latest reported quarters.

So we would want to see more than successful launches before declaring that Johor has turned the corner.

The clearest improvement would be several consecutive quarters in which completed-unsold Johor serviced apartments fall while transactions and rents remain healthy. We would then want to see new completions absorbed without simply replacing the old overhang with a new one.

Resale activity should also deepen. Owners need to be able to sell without large discounts relative to competing new launches.

Until those things happen together, strong marketing and rising launch prices tell us much less than actual absorption.

What we would watch	What improvement would look like	Why it matters
Johor serviced-apartment overhang	Sustained multi-quarter decline	Existing excess stock is clearing
New completions	Strong sales without rebuilding overhang	Demand is keeping pace with construction
Rents	Stable or rising despite handovers	Tenant growth is absorbing supply
Resale transactions	More depth across multiple projects	Investors have a realistic exit
Price gap between new and resale	Premiums become easier to justify	New launches are supported by fundamentals

So, is Johor Bahru property becoming overbuilt?

Yes. Johor Bahru is already overbuilt in serviced apartments, and today's high-rise pipeline makes further oversupply more likely unless demand grows much faster than it has so far.

We do not need to speculate about whether the problem exists. Completed inventory already proves it.

As seen above, Johor holds almost 52% of Malaysia's entire completed-unsold serviced-apartment stock. The state is simultaneously bringing forward a housing pipeline dominated by high-rise development.

What makes the answer more interesting is that Johor Bahru itself is doing quite well.

More than 42,000 residential properties changed hands across Johor in 2025. The RTS should make cross-border commuting easier. The JS-SEZ is bringing investment and jobs. Johor Bahru is a large, growing city beside one of the world's wealthiest economies.

Those advantages are strong enough to stop us from calling the whole market a bubble or predicting a broad collapse.

They are also exactly why developers keep building.

The danger now is that too many projects are chasing the same growth story. When investors can choose between thousands of completed units, cheaper resale apartments and another generation of new launches, being located somewhere in Johor Bahru stops being enough.

The next few years should therefore be much less forgiving than the last property upswing.

A genuinely walkable RTS location, a mature neighbourhood, strong owner-occupier demand, sensible density or an unusually attractive purchase price can still make a property work. Generic investor towers will have a much harder time.

Our final judgment is fairly sharp: Johor Bahru has built too many interchangeable high-rise investment properties, and it is still adding more.

The city can keep growing while those properties struggle.

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Johor. If you’d like to learn more about us, you can check our presentation page.