By now, you would have caught wind about the buzz around the Johor-Singapore Special Economic Zone (JS-SEZ), a cross-border collaboration between Singapore and Malaysia to promote economic growth for both partners, and to attract global investments in key sectors such as manufacturing, logistics and energy. Featuring nine flagship zones in Malaysia that span over 3,500 sq km, ambitious plans have been made to expand 50 projects in the first five years and 100 projects within a decade. This is complemented by the building of the Johor Bahru-Singapore Rapid Transit System (RTS) Link, which will connect Woodlands North MRT station to Bukit Chagar station in Johor, and is expected to be completed by end-2026.

With these exciting developments, what does it mean for the Singapore residential market and real estate investment at large? PropNex Picks spoke to Chua Shir Yee, Head of International Sales at PropNex International to find out more.

1.The JS-SEZ initiative aims to foster closer economic ties between Johor and Singapore. What are the components that you think will play the biggest part in it from a real estate perspective?

SHIR YEE: The JS-SEZ is designed not only to foster closer economic ties between the two regions, but to attract global investors. This collaboration is both strategic and complementary, aiming to create a comprehensive ecosystem and conducive investment environment across both regions.

In order to attract international investment, the JS-SEZ will leverage Singapore's status as a global financial hub and Johor's cost-effective environment. This collaboration will likely boost demand for a variety of real estate properties. Johor's role as a cost-efficient production base will support growth in industrial and residential property markets, while Singapore's commercial market may thrive from an influx of regional headquarters and high-value businesses.

2.Considering the JS-SEZ's focus on creating jobs and attracting foreign investments, how do you anticipate this will affect the real estate market on a long-term basis?

SHIR YEE: The JS-SEZ is set to transform the real estate landscape in both Johor and Singapore over the long term in a number of ways.

Firstly, the JS-SEZ will likely result in increased demand for properties in the vicinity, revitalising interest in properties in the area. This could help absorb unsold property inventory in the market and reduce real estate supply overhang.

The SEZ also aims to create approximately 20,000 skilled jobs within five years. Workers who take up these jobs will likely drive ongoing demand for residential and commercial properties, particularly in strategic locations near the SEZ. Similarly, property in such strategic areas may potentially see a growth in prices due to influx of said demand from professionals and businesses.

Lastly, there will likely be development of more lifestyle hubs near the JS-SEZ in the future, in order to attract and retain talent in the workforce. These hubs are expected to be integral to the region's growth and to feature modern amenities, diverse retail spaces, and recreational space.

3. How do you see the JS-SEZ impacting residential property prices and rentals of HDB flats and condominiums in Singapore, perhaps closer to the Causeway (e.g Woodlands, Marsiling, Admiralty)?

SHIR YEE: We reckon the JS-SEZ's focus on job creation and attracting foreign investment may likely transform the real estate landscape in both Johor and Singapore over the long term. However, in the near-term, we anticipate that any impact on the housing market in Singapore will likely be insignificant.

Property values in Singapore are underpinned by factors such as economic growth, location, infrastructure development, government policies, and prevailing market conditions, among others. We presently do not expect the JS-SEZ to have a significant impact on overall home prices in Singapore. In terms of the residential property leasing market, we may potentially see slightly softer rental demand for homes in Northern Singapore (e.g. Marsiling and Woodlands possibly), particularly should some tenants opt to rent units in JB owing to cheaper rentals. That said, a lot will depend on tenants' preferences, the ease of commuting between JB and Singapore, and how well the SEZ integrates both economies, potentially reshaping cross-border living and working trends.

4. For investors and homebuyers, what are some of the immediate opportunities or risks they should be aware of with the JS-SEZ?

SHIR YEE: The JS-SEZ presents both enticing opportunities as well as challenges for investors and homebuyers to navigate through.

Early-stage investments are highly attractive, having potential for significant capital appreciation as the SEZ develops. The multi-industry focus of the SEZ provides a wide range of investment options, investors can explore a diverse real estate portfolio spanning residential, commercial, and industrial sectors.

However, investors should be mindful of market volatility, as property prices could fluctuate due to uncertainty in the early stages of the JS-SEZ's development. The government's project-by-project approach to infrastructure development also introduces the risk for delays and fragmented growth if over-speculation occurs in certain areas. Nevertheless, strategic decision-making, a clear understanding of market dynamics and thorough due diligence will be key to helping investors fully realise the JS-SEZ's potential while managing its inherent risks.

Other risks that investors need to consider include forex risk, potential government policy risk, and other factors relating to the understanding of overseas property trends and market dynamics. As with any property purchases, buyers should always do their due diligence, including checks on the developer's track record. Generally, it is safer to buy from big, reputable listed developers in Malaysia, especially for off-the-plan property purchases where buyers are not able to conduct physical inspections before purchasing.

5. Do you think we will see more Malaysian investors investing in Singapore properties thanks to the JS-SEZ and RTS?

SHIR YEE: I don't think we will see a significant increase in Malaysian investors purchasing Singapore properties solely due to the JS-SEZ and the RTS. While these initiatives will enhance cross-border connectivity and promote business collaboration, they do not necessarily translate into higher property investments in Singapore.

The JS-SEZ is primarily designed to encourage economic cooperation, business expansion, and job creation between Johor and Singapore. This will likely lead to more business ventures and commercial activities rather than direct property acquisitions. For companies, investing in commercial properties in Singapore will still depend on financial viability, operational needs, and cost-benefit analysis.

For residential properties, the high additional buyer's stamp duty (ABSD) of 60% for foreigners remains a major deterrent, unless there is a strong necessity-such as work relocation or permanent residency aspirations.

6. Is PropNex marketing any residential projects in JB and what are some opportunities that investors can consider?

SHIR YEE: Yes, PropNex is actively marketing residential projects in Johor Bahru (JB), Malaysia. As Singapore's largest listed real estate agency, PropNex has expanded its footprint into Malaysia, with a dedicated PropNex Johor office that has been appointed to market over 30 projects, ranging from condominiums to landed houses and commercial opportunities.

PropNex Singapore will be working closely with the Johor office to bring these offerings to our investors here.

Some of the developments include:

• Lido Waterfront Boulevard: A premium waterfront development offering luxurious living spaces with panoramic sea views.

• MBW Bay Vista Tiara: A modern residential project featuring contemporary design and state-of-the-art facilities.

• Country Garden Danga Bay: A large-scale coastal development providing a blend of residential units, commercial spaces, and recreational amenities.

• R&F Princess Cove: A mixed-use development strategically located near the JB-Singapore Causeway, offering both residential and commercial units.

With our strong cross-border collaboration, we aim to provide exclusive access to some of the most promising real estate opportunities in Johor, ensuring that Singaporean investors are well-informed and positioned to capitalise on the market.

For more insights on how to navigate the property market in preparation for the JS-SEZ, as well as potential buying opportunities, do consult the International Sales team at PropNex International.

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