By Property Soul (guest contributor)
The most shocking news in recent weeks was the sudden announcement of Malaysia to terminate the Kuala Lumpur-Singapore High Speed Rail (HSR) project. When Dr Mahathir declared that “Malaysia’s decision to scrap the HSR project is final”, his words immediately shattered the dreams of developers and home buyers who place high hopes on the value appreciation of properties near the planned railway stations.
What now for Jurong Lake District?
The original plan of the HSR was to set up eight stations, namely Kuala Lumpur, Sepang-Putrajaya, Seremban, Ayer Keroh, Muar, BatuPahat, Iskandar Puteri and Singapore.
In Singapore, the HSR station was planned to be located inJurong East. At the station, there will be a new one-stop customs clearance for both Singapore and Malaysia. It will also connect North-South, East-West and Jurong Region MRT lines.
The HSR project was first announced jointly by the Prime Ministers of both countries after a Leader Retreat in February 2013.
What about Jurong Lake District?
A flashback to August 2014 showed our Prime Minister at the National Day Rally saying: “I thought tonight I should show … Jurong Lake – at sunset”. He continued to project a beautiful picture of the Jurong Lake District with all the amazing future development, before ending his speech with a sentimental note on ‘believing in Singapore’.
With his thought provoking speech in mind, I wrote the blog post “Is Jurong Lake District the next hotspot for property hunting?” My conclusion back then was “It is too early to tell … we are not there yet. We have a long way to go.”
As of 1st Quarter 2018, URA figures show that the office vacancy rate is 12.5 percent. For category 1 offices (buildings located in core business areas in Downtown Core and Orchard Planning Area), the vacancy rate stands at 14.5 percent.
And there is still a total supply of 791,000 sq m GFA of office space in the pipeline, which is about 3.7 times the total office space of the five Suntec City office towers.
How urgent is it to build a second Central Business District in Jurong?
Buying out of FOMO (Fear Of Missing Out)
Exactly three weeks before Malaysia canceled the HSR, responses were overwhelming at two new launches Twin VEW and Parc Rivierain West Coast area. The former saw buyers snapping up 442 out of 520 units at an average selling price of $1,399 psf.
A property agent told the media that the strong take-up was due to “the project’s proximity to both the Jurong Lake District and the planned Kuala Lumpur-Singapore high-speed rail’s terminus”. CDL bought an adjacent site at a higher price and is likely to launch at an even higher price. So this “might have induced bargain hunters to snap up Twin VEW units while they could”.
How can the buyers of Twin VEW be “bargain bunters” with a purchase price of $1,399 psf, when all the non-landed private homes transacted in April shows an average price of only $966 psf in Jurong East and $1,166 psf in West Coast?
Are they buying into the future, or are they speculating about the future? We haven’t started building the KL-Singapore High Speed Rail yet. What is the rush?
Now with the scrapping of the HSR project and possible downsizing of the development in Jurong Lake District, how many years do these buyers have to wait to break-even? How long does it take for Malaysia to clear RM1 trillion debt and reconsider HSR again?
People tend to go after something that is hot, that is under the limelight or on the radar. Never mind it has nothing special or doesn’t even worth the price. So long as everyone says it is good, they also want the same thing. They go for it under the fear of missing out.
“The pros play the property game to win. The amateurs play the property game to not lose out.”– Property Soul
On 28 June 2013, MCL Land launched a red hot new project J Gateway, located only a stone’s throw away from the Jurong East MRT station. It was marketed at $1,450 to $1,800 psf – still the record-breaking price in Jurong so far.
A 1,500 strong crowd showed up on the launch date. Desperate buyers submitted 1,400 blank cheques to their property agents for the balloting of 738 units.
“No other area has this,” said Mr Lee Fatt, 50, who lives in Jurong and bought a two-bedroom unit at J Gateway for $1.2 million. Another buyer, Madam Shirlyn Ng, 36, said that though prices were slightly high on a psf basis, she had no problem with it.
That evening, the “lucky” buyers went home only to find that the government had just introduced the Total Debt Servicing Ratio, on that fateful date of 28 June 2013.
For the “unlucky” J Gateway buyers whose tickets were not picked at the ballot, would they be secretly happy that they didn’t manage to grab a unit at the launch?
A loss can be a blessing in disguise years later
Many years ago, a friend of mine had a boyfriend she was not exactly happy with. But when she learned that there was a third party trying to steal her man, she refused to surrender without a fight and did everything she could to win him back. But she still lost to the competition in the fierce battle.
A few years later, she managed to move on and tied the knot with another guy. He is a caring husband and a responsible father, and quite well-off too. She no longer feels bitter about her loss in the past.
What about the winner in the love triangle? Her “trophy” turned out to be a bad choice. He is self-centered and abusive. For a long time, he was unemployed, addicted to gambling and had extramarital affairs too. She suffered tremendously during their marriage.
My friend said she doesn’t pity that woman. But she is secretly happy that she narrowly escaped the tragedy of marrying that man.
This is exactly what Hong Kong writer Yi Shu (亦舒) said in one of her essays: “We aunties all have this similar experience. That X, Y or Z whom all of us once admired, now even if you gave him away with one million US dollars nobody would dare to take him. His aged appearance, self-righteous attitude and lack of knowledge and manners… If unfortunately, one day you saw him in the street, you would quickly dash across the road to avoid bumping into him. Imagine if you had got this guy, today you would be crying uncontrollably.”
Next time before you jump on the bandwagon, be sure to open your eyes.