Property research group, Juwai IQI has marked the recent ascension of His Majesty the 17th Yang di- Pertuan Agong of Malaysia, His Majesty Sultan Ibrahim as a new chapter for the Johor real estate market and could make the state’s GDP 3% bigger by 2029.
Revered as a dynamic leader in the real estate industry, the new king is poised to collaborate seamlessly with the government, steering the initiation of crucial infrastructure projects, Juwai added. Anticipated developments such as the high-speed rail connection to Singapore, a cutting-edge light rail transit system, and the establishment of special financial zones have the potential to redefine Johor’s economic landscape and reshape its property market.
Juwai IQI CEO Kashif Ansari believes the new king’s reign will herald substantial private investment in infrastructure, leading to a spill over into industry, tourism, and residential and commercial property. Ansari added, “The previous King, His Majesty Al-Sultan Abdullah, has been a rock of stability during the pandemic and other challenges of recent years. The new king, His Majesty Sultan Ibrahim, can build on this success with his focus on infrastructure, helping transform the economic and real estate outlook.
The firm is looking at Johor evolving into a major city, akin to the next Klang Valley. This is a golden opportunity for property development, especially in areas like Tuas Link and surrounding the new HSR stations. In this vision, the state’s economy will be 1% to 3% larger than it would otherwise have been in 2029, and those gains will compound each year.
Johor is at a turning point moved ahead into 2029, what you would see in Johor is some thriving new special economic zones channelling foreign investment, bustling activity along the RTS, a high-speed rail line to Singapore that is already about 30% complete, and a 30-kilometre light rail transit system that is also under construction and will further help reduce traffic congestion. Even Forest City will finally be a thriving district full of locals and internationals who can enjoy its beaches and residences and also have plenty of employment opportunities.
As Johor becomes more tightly integrated with the financial centre of Singapore, foreign direct investment will increase, employment will increase, wages will increase, and property prices will increase. Without these investments, you would expect to see more traffic congestion, slower economic growth, lower, employment, and lower property prices.
Juwai says it is seeing increase in customer interest in Johor Bahru properties, mainly due to the news of the Singapore-Malaysia Railway (SMRT). Projects driven by the new king and the Parliament will create even more demand. “Since the second half of last year, our Johor team has seen a 30% increase in transactions. Our biggest challenge now is having enough agents and negotiators to handle all the business. The Forest City Special Financial Zone could be launched later this year. This Zone plus the potential new HSR station in Forest City will turn the area into a new development zone that takes some of the pressure off more congested parts of Johor. Forest City will become appealing for locals and internationals, and we should see new construction there.
High-Speed Rail to Drive Economic Growth
These projects are not just about moving people around because they will create economic growth. Look at China to see how high-speed rail infrastructure can push an economy forward. Research that looked at more than 120 cities in China found the HSR network there increased local GDP by approximately 3.3 percentage points. It also significantly boosted industrial output and the number of industrial enterprises. The researchers also concluded that large-scale transportation infrastructure construction made possible the rapid development of Western Europe, Japan, and the United States.
The next five years have the potential to be transformative. Juwai believes the new king and the government will drive a major uplift in Johor’s infrastructure, especially in terms of railway connectivity. Singapore and Kuala Lumpur are the perfect cities for a high-speed rail link because nearly five million people already travel between the two cities every year. This was the single busiest international airline route in the world in 2023. The number of travellers on the route is also increasing. It was up 50% in 2023 compared to 2022. This high-speed rail route would have an instant market that makes it financially viable.
The RTS project hasn’t opened yet but has already driven investment, employment, and new residents in Johor. Transportation infrastructure creates access to locations that had been isolated. This unleashes tremendous value creation and economic opportunity.
