JOHOR PROPERTY UNDER THE LENS: GROWTH OR BUBBLE RISK?

JOHOR PROPERTY UNDER THE LENS: GROWTH OR BUBBLE RISK?

Johor’s property market is enjoying renewed attention, but experts caution that optimism must be tempered with discipline. In a recent webinar hosted by PEPS Ventures, supported by ValuationXchange, Sr. Samuel Tan of Olive Tree Property Consultants and Dr. Lee Nai Jia of PropertyGuru Group shared candid perspectives on demand, demand drivers, risks, and the safeguards needed to ensure Johor’s growth story does not slip into a bubble.

‍

Growth Drivers: Connectivity and Investment

Samuel Tan highlighted that infrastructure projects such as the Rapid Transit System (RTS) link (due 2027), the Johor-Singapore Special Economic Zone (JS-SEZ), and the Electric Train Service (ETS) are fuelling demand. Since 2023, around 3,000 overhang units have been absorbed, and properties near transport hubs have seen price appreciation of up to 20%, with service apartments jumping from RM800 to RM1,200 per square foot.

Johor also secured RM56 billion in approved investments in H1 2025, accounting for almost a third of Malaysia’s total. These tailwinds have strengthened confidence among developers, buyers, and cross-border investors.

‍

Source: Presentation Slide of Sr. Samuel Tan of Olive Tree Property Consultants 

Dr. Lee’s data echoed this, showing that unit prices are on the rise across apartments, condominiums, and serviced residences, with demand largely keeping pace. Singaporean demand, in particular, has played a big role, though his slides noted that foreign demand for residential peaked earlier in 2025 and has since moderated.

‍

Risks Beneath the Optimism

Both speakers cautioned that risks remain:

• Overhang and mismatch: Despite recent absorption, Johor still had 11,810 unsold service apartments as of end-2024. Locations, pricing, and developer inexperience were key contributors.
• Affordability: Incentives and rebates may mask true transaction prices, distorting valuation benchmarks.
• Speculation: Cross-border demand has inflated prices in some pockets, potentially beyond local affordability.
• Scams and opaque practices: From falsified documents to inflated sale prices and “one-day sale” announcements, loopholes in the system continue to expose both buyers and banks.

‍

‍Source: Presentation Slide of Dr. Lee Nai Jia of PropertyGuru Group 

As Sr. Samuel warned, bubble risks are fuelled not only by overbuilding but also by scams, speculative activity, and opaque reporting of sales.

‍

Why Transparency Matters

For valuers and banks, these dynamics highlight a critical challenge: how to uphold accuracy and independence in valuations when the market itself contains distortions.

Valuations underpin loan approvals, loan-to-value ratios, and ultimately the resilience of the financial system. Without transparency, the risk of inflated benchmarks and future defaults increases. As Dr. Lee observed, sustainable growth requires more than rising prices, it requires market trust built on reliable data and transparency.
‍

‍

Looking Ahead

Johor’s story is one of potential and risk in equal measure. Infrastructure and foreign investment provide strong fundamentals, but affordability gaps, overhang, and speculative practices threaten stability if left unchecked.

The message from the webinar was clear: valuation integrity is the foundation of a sustainable property market. For growth to be resilient, banks and valuers need the right tools to operate independently, transparently, and with full accountability.

As Johor positions itself for the next phase of development, embedding transparency through digital workflows like ValuationXchange will be essential. Only then can the state’s property market move from a cycle of short-term speculation to long-term sustainability, ensuring real estate continues to be a pillar of trust for both Malaysians and cross-border investors.

‍