JOHOR:THE Kuala Lumpur-Singapore High-Speed Rail (KL-SG HSR), regarded as one of the largest infrastructure developments in Malaysia, will boost the housing market if given the go-ahead next year.
iProperty.com Malaysia Sdn Bhd general manager David Mawer said states like Johor needed catalytic projects such as the KL-SG HSR to spur investments.
Mawer said any new investments coming into Johor would have a spillover effect on the housing market.
‘It is good to hear the KL-SG HSR is going into Singapore. The government has made decisions regarding the affordability of infrastructure projects, and the KL-SG HSR will build confidence among the people and investors, especially in Johor, which will have the longest stretch of the high-speed bullet train,’ he told the New Straits Times (NST).
The construction of the KL-SG HSR was due to start last year, but Singapore and Malaysia agreed to postpone it until May next year.
NST had reported that the proposed 350km line would cost RM60 billion to RM65 billion. Based on estimates in 2015, the KL-SG HSR cost per km for systems and track is US$10 million (RM42.6 million). This means, for the entire length, the cost would be RM15 billion.
Civil infrastructure costs three times more than the systems and track, which works out to RM45 billion.
The KL-SG HSR agreement was first signed by the previous government in 2016, committing both nations to the project.
But following the 14th General Election, Prime Minister Tun Dr Mahathir Mohamad announced that the project would be scrapped due to high cost.
However, a new agreement was inked last year between Economic Affairs Minister Datuk Seri Azmin Ali and Singapore’s Transport Minister Khaw Boon Wan at the Prime Minister’s Office in Putrajaya.
Under the new agreement, the high-speed rail express service is expected to start on Jan 1, 2031, instead of Dec 31, 2026.
MYHSR Corp Sdn Bhd said in September that the government was reviewing the project’s business model, including the structures and entities needed.
Dr Mahathir had indicated that the government was exploring proposals to reduce the cost of KL-SG HSR, which could mean a potential revival of the project.
He told reporters at the launch of the Bandar Malaysia project here recently that to keep cost low, the government might reduce the speed of the train.
‘The HSR will go ahead, but we will have to find out what speed (of the train) we should have. It’s not necessary for it to be 400kph because if it travels at that speed, it may reach Alor Star. Maybe a lower speed will reduce the cost,’ said Dr Mahathir.
The proposed KL-SG HSR project will see seven stations in Malaysia - Bandar Malaysia, Sepang-Putrajaya, Seremban, Melaka, Muar, Batu Pahat and Iskandar Puteri. The Singaporean station is in Jurong East.
The towns hosting a high-speed rail station will enjoy significant urban development and the consequent economic catalyst as a result.Property experts believe that residents living near the KL-SG HSR line could rightly expect their property to benefit in terms of capital appreciation and better rent yield.
The KL-SG HSR line is expected to reduce travel time between Kuala Lumpur and Singapore to 90 minutes compared with 11 hours on existing train services.
Data released by the National Property Information Centre have shown signs of recovery in the Johor property market.
The 2018 Property Market Report revealed that Johor recorded 41,653 transactions worth RM19.33 billion last year,an increase of 7.8 per cent in volume and 3.8 per cent in value.
The residential sub-sector accounted for 64.5 per cent of the state’s overall transactions with 26,885 homes worth RM8.77 billion, eight per cent more in volume and 1.5 per cent higher in value than the previous year.
‘When you talk about property oversupply, you have to look at it on an area basis.
‘In property terms, it needs to be looked at certain areas. If there is an oversupply in one area that doesn’t meet my need, it shouldn’t be my concern as I may be looking for a property in an area that is under-served by developers,’ said Mawer.
Nevertheless, Mawer expected the oversupply of property in the market to remain next year.
He said it would continue to be a challenge for the industry and put pressure on new project launchings.
‘There has been a reduction in new launches, so this means less supply in the market. If a project is in a strategic location, near public transport, malls and schools besides the size and price being suitable, it will do well.’
iProperty.com’s survey found that factors influencing the choice of a property, ranked by importance, were location, price, safety and security, size, building/type, value and trends, proximity to amenities, accessibility, proximity to family and friends, and public transport.