JOHOR BAHRU - Property buyers have been flocking to Iskandar Malaysia to buy landed homes since 2006, but lately, high-rise living there has caught on in a big way.
Developers have been ramping up the supply and quality of condominium units and new launches now cost almost twice as much as those released early last year.
"Prices have risen fastest in Medini and Puteri Harbour, having risen nearly 100 per cent since the first projects there were launched early last year," said Mr Dominic Lee, a PropNex agent who is active in the Iskandar market.
For example, Afiniti Residences in Medini, an area in Iskandar's Nusajaya zone, was launched last weekend with prices ranging from RM850 (S$340) per sq ft (psf) to RM1,000 psf.
Compare that with 1Medini, the first high-rise residential project in Medini, where units were sold at an average price of RM450 psf when they were launched in January last year.
Over at Puteri Harbour, Iskandar's answer to Singapore's Keppel Bay, freehold condo Pinetree Residences was launched in March for RM1,210 psf to RM1,616 psf. At around the same time last year, serviced apartment Somerset Puteri Harbour Iskandar was launched at an average price of RM800 psf.
CBRE Malaysia noted in a report that the prices of new launches are almost triple that of condo projects that were launched several years ago and have since been completed.
"The completed high-rise residential supply in Iskandar is generally less sophisticated in terms of concept and pricing when compared to recent launches," the report said.
"While new launches have breached the RM1,000 psf mark with fast take-up rates, transaction prices of completed high-rise units are generally less than RM400 psf, depicting an increase in discerning property purchasers in the region."
Developers have been swooping in to take advantage of the high demand for luxury condos. Over the next three to four years, they are building another 13,500 condo and serviced apartment units in Iskandar.
In contrast, there were only about 8,000 such units built between 2006 and last year.
Chesterton Suntec research head Colin Tan said the explosion in the growth of Iskandar's condo market was likely triggered by strong interest from foreigners, particularly Singaporeans.
Since property cooling measures were imposed here, Singaporeans have rushed to Iskandar to invest in condo units, he noted.
"And now that Iskandar has gained some respectability with the participation of Singapore government-linked firms, it gives (buyers) added confidence," he said.
"The same thing happened in Kuala Lumpur: When Singapore developers such as CapitaLand and Wing Tai built condos there, Singaporeans started buying there too. And when Singapore investors buy, Malaysians will buy too."
Mr Kevin Goh, associate director of estate management at CBRE Malaysia, agreed, noting that Johorians have lately warmed to the idea of high-rise living.
"People have come to realise that security is tighter at condominiums, and for older buyers, they like the idea of living in a small apartment that they can easily leave behind when they travel, rather than a big bungalow."
Singaporeans and Malaysians are not the only ones who see the potential of Iskandar's high-rise homes.
A Japanese investment fund bought an entire tower of 285 units at Iskandar Residences in Medini, launched last month.
Launched: Last weekend
Price: From RM850 psf to RM1,000 psf
Launched: January 2012
Price: Average of RM450 psf
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