(File pix) The Astaka @ One Bukit Senyum in Johor Baru.

There is oversupply in the housing sector in Johor, but the market could correct itself in the long term, said Astaka Holdings Ltd chief executive officer Datuk Zamani Kasim.

“There is an oversupply of apartments and condominiums in Johor Baru because developers were ‘enthralled’ with Iskandar Malaysia when it was first announced, considering all the initiatives that they are taking like Educity and pushing the industrial sector in the region.

“The developers saw this as an opportunity for them to start early while the other initiatives were still in progress. They (the authorities) are projecting a population of three million by 2025 in Iskandar Malaysia with 1.7 million in Johor Baru alone. With this additional numbers, there will be a need for housing. So, I believe the market will correct itself in the long term, despite the current oversupply situation,” Zamani told NST Property.

He said about 60 per cent of existing housing stock in Johor, according to government statistics, was affordable housing, and not properties that were priced at RM1 million and above.

Zamani said Astaka launched 438 units at its maiden project, The Astaka @ One Bukit Senyum in Johor Baru and had achieved 72 per cent take-up rate.

The units were between 2,207 and 2,659 sq ft and each was worth more than RM2 million, he said.

“We are selling our units at RM1,350 per sq ft (psf) and have achieved RM800 million in sales,” he said.

According to Zamani, the main problem for buyers of affordable housing was the qualification for bank loans.

“While that is a problem the authorities also have to look into issues such as Bumiputera quota and discount at 15 per cent in Johor, which is the highest in the country. in other states, Bumiputera discount is between five and 10 percent.”

On the effect of the implementation of the Sales and Services Tax (SST), Zamani believes it will result in a reduction in property prices.

“I believe (construction) cost will drop with the SST because of the exemption for building materials. Under the Goods and Services Tax regime, the cost for developers was higher.

“I think there will be a reduction in cost after SST and that would reflect on the selling price. It remains to be seen by how much,” he said.

Zamani said while cost had reduced, other costs, including labour cost, had risen due to the implementation of minimum wage and government fees.

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