All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Johor's property market is included in our pack
Considering buying real estate in Johor? You're not alone!
Many people are intrigued by Johor's Malaysian charm and dream of owning a modern apartment or a stylish villa in this region.
Would it be a profitable investment, though? Are property prices increasing in Johor? What is the price per sqm? Should you consider buying in Johor Bahru or Iskandar Puteri? Are there any secret taxes? What rental yields should I expect?
We've solved it for you.
The BambooRoutes team has extensively researched this market. Actually, we've compiled all our findings in one pack. Get it now.
In this article, get ready to receive valuable insights from us.
How's the property market in Johor?
Are property prices rising or falling? Let's consult the most recent data and stats.
Types of properties
In Johor, you can find various types of properties for sale.
These include apartments, condominiums, landed houses (such as terraced, semi-detached, and bungalows), commercial properties like shops and offices, as well as vacant land for development.
Each type offers its own benefits and features, catering to different preferences and needs of buyers, whether they are looking for urban convenience, spacious living, business opportunities, or investment potential.
What's better: buy or rent?
(If you plan to use it yourself and not as a rental)
If Johor is your city of choice, you may be thinking about the advantages of buying versus renting a property in this dynamic Malaysian state.
Usually, buying is better than renting in Johor due to the availability of affordable housing options and the potential for capital gains.
On the flip side, renting offers greater flexibility if that's what you prefer.
Property pricing in Johor
On average, according to the updated data from Central Bank Of Malaysia, buying a property in Johor would cost you around $1,470 per square meter.
It's just an average. The value of a square meter for a property in Johor Bahru might differ from an apartment in Iskandar Puteri. We actually offer a more in-depth analysis in our pack for buying property in Johor and in Malaysia.
To give you a sense of scale, it means that, instead of buying an apartment in Singapore, you can get 9 properties in Johor.
Also, housing prices in Johor are 40% cheaper than in Kuala Lumpur.
The most expensive places in Johor are probably Nusajaya, Johor Bahru City Centre, and Iskandar Puteri, while the cheapest areas are likely to be Segamat, Kluang, and Pontian.
Trends
First and foremost, we have to acknowledge that Malaysia is, today, a reliable and stable choice for investors. The last Fragile State Index that has been reported for this place is 56.4.
Don't overlook this while weighing the pros and cons of buying a property in Johor.
If we look at the IMF’s forecasts, we can see that Malaysia's economy is expected to soar by 20% in the coming 5 years, resulting in an average GDP growth rate of 4%.
If you want to invest in real estate in Johor it's a good thing because, when people experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Malaysia, the average GDP per capita has changed by 5.5% over the last 5 years. It's a good number.
This data is a positive signal - housing prices in Johor might soar in 2024 and after that.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Malaysia right now.
Buying property in Johor
Buying real estate in Johor can be difficult due to the lack of reliable and updated information available. That's why we have created the pack to buy property in Johor and in Malaysia.
Buying process
Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.
Here, we are providing you with a simpler version to assist you in better comprehending the information.
This is the step-by-step process to purchase a property in Johor, Malaysia:
- Research the property market and financing options in Johor.
- Engage a registered real estate agent licensed by the Board of Valuers, Appraisers, Estate Agents and Property Managers Malaysia (BOVAEP).
- View and select properties that meet your criteria, considering factors like location, amenities, and future developments.
- Negotiate the price and terms with the seller. Once agreed, sign a Letter of Offer and pay a deposit (usually 2-3% of the property price).
- Engage a lawyer with experience in Malaysian property transactions to handle the legal process.
- Conduct property due diligence, including land searches and verifying the property's ownership at the Johor Land Office.
- Obtain necessary approvals from authorities like the State Authorities and the Department of Land and Mines (PTG).
- Sign the Sale and Purchase Agreement (SPA) within 14 days after the Letter of Offer, and pay the remaining down payment (usually 7-8% of the property price).
- Pay the balance of the purchase price, typically 90% of the property price upon signing the SPA.
- Transfer ownership at the Johor Land Office and pay the required Stamp Duty, typically 1% to 4% of the property price.
- Settle outstanding fees and taxes, including the Real Property Gains Tax (RPGT) if applicable.
- Obtain the property's title, which may take some time. Once completed, you have successfully purchased the property in Johor.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Malaysia.
Make a profitable investment in Johor
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Where to find a property
You may embark on your property search in Johor with the help of these websites:
- PropertyGuru - Malaysia's leading property site with a wide range of properties for sale and rent, featuring detailed information, maps, and photos.
- iProperty - A top property platform offering extensive listings for buying, renting, new launches, commercial properties, as well as property tools, guides, and insights.
- EdgeProp - Malaysia's premier property website, providing comprehensive listings, news, resources, and tools for buying, renting, and investing in properties.
- Property Queen - A property platform in Malaysia offering listings of both residential and commercial properties for sale and rent.
- Dot Property - Dot Property is a dedicated real estate website in Malaysia that enables users to search for properties to buy or rent.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Malaysia.
Which properties for which budget?
As mentioned before, the average price per sqm in Johor is $1,470. If you're interested in a one-bedroom property with 60 square meters, it would be priced at approximately $88,000, and a two-bedroom with 85 square meters would cost around $125,000.
However, property prices can vary because of their qualities and where they're located.
The best spots in Johor usually have higher housing prices. A house in Nusajaya might be around $280,000, and a property in Johor Bahru could cost about $160,000.
But there are less expensive options in certain locations. You may find a house in Ulu Tiram for $110,000, or a house in Pasir Gudang priced only at $90,000.
We give more details about property types and areas in our full pack for buying property in Malaysia.
Common mistakes
Here are the main pitfalls specific to buying a property in Johor, Malaysia:
- Foreign ownership restrictions: Be aware of limitations on property ownership for non-Malaysian citizens, requiring approval from government authorities.
- Malay Reserve Land: Some properties may be on Malay Reserve Land, limiting ownership and usage rights to Malays and affecting resale potential.
- Bumiputera quota: Certain properties have a quota for Bumiputera buyers, potentially restricting non-Bumiputera individuals from purchasing.
- GST and stamp duty changes: Keep up-to-date with tax policy changes that can impact property transaction costs.
- Land conversion issues: Verify the land's approved usage to avoid investing in land designated for agricultural purposes.
- Cultural and heritage site restrictions: Some areas may have strict development rules to preserve cultural and historical landmarks.
- Leasehold vs. Freehold: Understand the implications of leasehold properties, which may have limited tenure compared to freehold properties.
- Currency exchange risks: Fluctuations in currency values can impact the overall cost of the property for foreign buyers.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Malaysia Property Pack
Living in Johor
Life in Johor is a great combination of city and nature, with plenty of opportunities for outdoor activities, shopping, and excellent property investments.
Cost of living
The cost of living in Johor is generally lower than in other parts of Malaysia. Groceries, transportation, and housing are all relatively affordable in Johor.
Here are some examples to better understand the cost of living in Johor, Malaysia:
- Rent for a one-bedroom apartment in the "Mount Austin" neighborhood of Johor Bahru: $500 per month.
- A meal at a local hawker center with "Mee Rebus," a traditional Johorean noodle dish: $4.
- Monthly bus pass for public transportation in "Skudai" area: $20.
- Utilities (electricity, water) for a small apartment in "Taman Sentosa": $45 per month.
- A cup of "Kopi O," a local black coffee served without sugar: $1.
- Entrance fee to "Angry Birds Activity Park" in Komtar JBCC: $15.
- Monthly membership at a fitness center in "Bukit Indah": $40.
- A bottle of "Johor Gold," a popular local beer brand: $3.
Areas
Since we want to make things easy to understand, we've created a summary table that tells about the different areas in Johor. For yields, prices and rents, check our property pack.
| Place | Description | Strengths | Weaknesses |
|---|---|---|---|
Johor Bahru | Johor Bahru is the capital city and a major commercial hub with a growing property market, fueled by its proximity to Singapore and developing infrastructure. | High demand from local and foreign investors, modern amenities, and strong rental potential. | Competition from established property developers, traffic congestion, and occasional supply overhang. |
Iskandar Puteri | Iskandar Puteri is an emerging economic zone and flagship development area, offering various property investment opportunities, including residential, commercial, and industrial properties. | Government incentives, strategic location, and a wide range of property options to cater to different investor preferences. | Dependency on Iskandar Malaysia's success, potential oversupply in certain property segments, and susceptibility to external economic factors. |
Skudai | Skudai is a rapidly growing suburb with affordable property options and proximity to universities and amenities, making it attractive to students and young professionals. | High potential for student housing rentals, improving infrastructure, and lower property prices compared to central Johor Bahru. | Relatively less developed infrastructure, limited upscale property options, and potential fluctuations in demand due to educational cycles. |
Kulai | Kulai is a developing town with increasing industrial activities and connectivity, presenting opportunities for commercial and residential property investments. | Affordable land prices, growing industrial sector, and proximity to Senai International Airport. | Limited amenities and recreational facilities, relatively lower demand compared to more established areas. |
Mount Austin | Mount Austin is a vibrant township with a mix of residential and commercial properties, popular among young professionals and families. | Thriving commercial activities, proximity to educational institutions, and a well-established neighborhood. | High competition in the property market, potential traffic congestion, and limited land availability for new developments. |
Bandar Dato' Onn | Bandar Dato' Onn is a growing township with a blend of residential and commercial developments, offering various property options with potential for value appreciation. | Developing infrastructure, strategic location along major highways, and proximity to established townships. | Some areas still under development, potential oversupply in certain segments, and susceptibility to market fluctuations. |
Life in Johor
The economy of Johor is primarily driven by industrial and manufacturing activities, with sectors such as automotive, electronics, and oil and gas contributing significantly to the state's GDP. It is also a major tourist destination, with a variety of attractions such as the Legoland Malaysia Theme Park and the Johor Premium Outlets.
What expats usually like the most in Johor is its proximity to Singapore, allowing for easy access to the city's attractions, and its diverse cultural influences, from the local cuisine to the vibrant nightlife.
Access to healthcare in Johor is generally good, with a wide range of public and private health care providers.
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Renting out in Johor
For those aiming to buy property solely for renting out and earning income.
Long-term
According to the data reported by Wikipedia, the home ownership rate in Malaysia is 77%, which is average.
When people buy in Johor it's usually to live there, and not to rent out.
If you decide to rent out long-term, you might want to target people who are looking for a more affordable rental option in Johor, such as young professionals, students, and those who are relocating for work. Additionally, Johor is also a popular destination for retirees, so you may be able to attract those who are looking for a peaceful and comfortable place to settle down.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Condo in Johor Bahru City Center | Professionals, families | Urban living, convenient amenities | $500 - $1500 |
Terrace House in Skudai | Families, students | Nearby educational institutions | $300 - $1000 |
Apartment in Nusajaya | Expatriates, young professionals | Proximity to business parks | $600 - $2000 |
Bungalow in Iskandar Puteri | High-income individuals, families | Luxury living, gated communities | $1500 - $5000 |
Now, you will probably ask us about the yields. Unlike for other places, it would be difficult to give you the average rental yields in Johor due to insufficient long-term rental properties available for analysis. Also, it's quite diverse. For example, rental yields in Johor Bahru and Iskandar Puteri are quite different from those in remote areas.
Finally, if you want to rent long-term in Johor, be aware that the income tax stands at 45-50%, which is quite high.
Short-term
You could also decide to rent short-term to tourists visiting the area, as well as business travelers visiting the nearby cities of Johor Bahru and Iskandar Puteri. Additionally, you could also rent to students attending the local universities and colleges.
If you decide to go with that option, look for properties in Johor Bahru, particularly the Danga Bay, Taman Molek, and Bukit Indah areas. These neighbourhoods are popular among short-term tenants due to their convenient location and access to amenities.
Currently, there are approximately 3,690 active Airbnb listings in Johor, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $30.
You have the opportunity to generate some additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Johor can make around $400 per month. Also, the average occupancy rate is estimated at 62%.
Is it worth buying real estate in Johor then?
Buying a property in Johor can be a smart move if you're seeking long-term value and affordable housing. The region offers potential for capital appreciation, with property prices considerably lower than in Kuala Lumpur.
If you're a first-time buyer or looking to maximize your budget, Johor could be your ticket to home ownership. Rental income is also on the table, especially in areas popular among students and expatriates, thanks to the region's lower cost of living. Plus, the proximity to Singapore makes it a viable alternative for those who work or do business across the border.
On the flip side, if you're looking for quick returns or are a foreign investor, Johor might not be your best bet. The property market can be slow to yield substantial gains, and foreign ownership restrictions could limit your options.
Additionally, high income tax rates for rental income and the potential impact of currency exchange fluctuations can dent your profitability. Be cautious about Bumiputera quotas and other regulations that might hinder your investment plans.
In essence, Johor presents opportunities for those with a long-term vision and a keen understanding of local nuances, but it may not be ideal for short-term gains or foreign investors facing restrictions and tax challenges.
Make sure you understand the real estate market in Johor
Don't rush into buying the wrong property in Malaysia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.