Johor Bahru

Beginner's guide
to buying property.

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Section 1

Investing in Johor Bahru…

...for the long-term.
Johor Bahru is the southern economic hub for Malaysia, partly due to its proximity to Singapore. The Iskandar Malaysia project, launched in 2006 to develop an economic corridor and powerhouse in the region, has driven demand for commercial, industrial and residential properties in the state of Johor. Closest to the Singapore border is Iskandar Puteri, one of the flagship developments of Iskandar Malaysia, earmarked as the centre for investment, financial and business opportunities. Located mere minutes from the Singapore checkpoint and boasting state-of-the-art infrastructure, Iskandar Puteri is one of the top property hotspots in the country.

 

Compared to Kuala Lumpur, there is a greater variety of properties in Johor Bahru at different price points, making it an attractive location for investors with a wide range of appetite. The future-ready masterplan of Iskandar Malaysia has led to some of the most advanced infrastructure and facilities in the region being built here and the relocation of foreign multinational companies to this area. It has also become an attractive residential location for expatriates who work in Singapore.

 

Investments continue to pour in. Since 2006 until March 2018, a total of RM262.43 billion has been committed to Iskandar Malaysia, with 39% of it being foreign investments; as a result, businesses opportunities and job creation are in abundance. This bodes well for the property market, and long-term gains are in store for those who choose to buy a property in Johor Bahru.

Section 2

Set a budget.

Your debt service ratio
This is the total of all outstanding loans (personal, minimum credit card payments, car, etc) against your total income. It determines how much you can borrow from the bank, or at all. In Q1 2017, Bank Negara Malaysia reported that 42% of approved loans have debt service ratios of less than 40%.

 

Your monthly commitment
Rule of thumb: allocate no more than a third of your take home pay for your home loan repayment.

 

Additional costs and fees
On top of the downpayment (usually 10% with a 90% margin of finance) you will have to allocate about another 10% for legal fee, stamp duty, etc.

 

Subsequently, there could be on-going costs, such as maintenance fee and sinking fund.

Section 3

Browse and shortlist property listings.

If you are considering a new, off-plan development, make sure that the developer has a good track record of delivering quality construction and finishing, in a timely manner. Since you cannot view the actual unit before purchasing, consider the following:

 

  • What is the unit’s orientation;
  • If there is no show unit, imagine walking in the layout—where are the walls, windows and doors? Does it flow well from one space to another?
  • Is the unit removed from noise sources, such as the lifts, water tank and intermediate pump room;
  • Where is the car park;
  • What facilities does it have to offer?

Start with our search engine to explore what UEMS has to offer.

Section 4

Compare prices and specs

Check out transacted prices and specifications of similar properties in the vicinity to determine if you are getting value for your money.

Section 5

Consider alternative home ownership solutions

If you are a young homebuyer or are uncertain about your future needs and commitments, then UEM Sunrise’s EASY Own Plan offers alternative solutions to make home ownership more flexible and easily attainable.

 

Under the EASY Own Plan, UEM Sunrise offers a rent-to-own programme for selected properties, allowing our customers to move into their dream home at a dream location, and reside there while considering purchasing it:

 

  • Customers enter into a 24-month tenancy agreement and may, within that period, exercise the option to buy the home at an earlier "locked price";
  • Besides the monthly rental, a deposit of 2.5 per cent of the gross sale price is required at the start of the tenancy:
    • If the customer opts to buy the home, the deposit will be deemed as part of the payment.
    • If the customer opts to not buy the home, the tenancy continues until the end of the tenancy period and the deposit—less the amount required to "make good" the home, outstanding utility bills, etc.—will be returned to the customer.

In Johor Bahru, the rent-to-own programme is presently available for UEM Sunrise’s Residensi Ledang development in the prestigious East Ledang area.

Section 6

Make an offer.

For new developments, you will have to pay a booking fee to the agent. Make sure that your deposit/booking fee is refundable if you are unable to obtain a home loan or the valuation is much lower than the purchase price.

 

Section 7

Apply for a loan.

Shop around for a bank that can offer you the best interest rate and terms. Factors to consider:

 

  • Traditional (fixed amount) vs Flexible (reduce interest by saving money in the linked current account).
  • Interest rates.
  • Margin of financing: the maximum is usually 90%; the remainder 10% comes out of pocket.
  • Lock-in period: the period during which a penalty will be charged (usually 2% or 3%) if you pay off the loan before the end of the tenure.

Get approval for your loan before the next step.

 

UEM Sunrise further offers EASY Financing by assisting buyers in narrowing the gap between the loan amount attained from the end-financier and the home purchase price.

 

  • For a deposit from as low as RM5,000, buyers are able to start the process of obtaining a dream home built by UEM Sunrise;
  • Buyers need only to obtain a loan of at least 60 per cent from an end-financier;
  • UEM Sunrise offers financial loan of up to 30 per cent to make up the balance of the purchase amount.
Section 8

Sign the loan agreement and SPA

Have the lawyer prepare the Sales & Purchase Agreement and prepare the remainder of the 10% downpayment. Your lawyer should look out for your interest, but understand all the terms and conditions before signing.

Section 9

Delivery of Vacant Possession

Vacant possession means that the property is in a state fit for occupancy.

 

For new residential developments, developers have to deliver the vacant possession within 24 months for landed properties and 36 months of high-rise stratified buildings.

Section 10

Get the keys to your new home

  • After the bank disburses the remainder of the loan, pay the legal fees and stamp duty.
  • Your lawyer will arrange for the handover of the keys. Inspect the property to ensure that it is in the agreed condition, and that all maintenance and utilities fees up until the handover date have been cleared.

What remains is to enjoy your new home!

A note for foreign buyers…

Foreign property ownership is restricted to minimum price thresholds, depending on the property’s location; in general, the minimum price threshold for foreign buyers in the state of Johor is RM1 million, except in designated international zones, such as Iskandar Puteri, where the minimum price threshold for landed residences is RM2 million. However, there are exemptions and special status for different areas in Johor, so you should enquire regarding this for each property that you are interested in.

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