SINGAPORE: After having been in a worrying downward spiral since mid-2023, the Malaysian ringgit has finally rallied, hitting an 18-month high on Wednesday (Aug 7).
In May this year, the currency reached a 26-year low of US$1 to RM4.78. By this week, however, it had climbed back to US$1 to RM4.42 as Malaysia’s economic performance saw an improvement.
Despite the ringgit’s present strength, property in Johor has continued to be in high demand among Singaporean buyers, according to a report earlier this week in the South China Morning Post.
Singaporeans are still flocking to the southern Malaysian state in search of an additional residence for investment, vacation, or retirement.
Considering how space-challenged Singapore is, this is no wonder. Properties in Johor are likely to be substantially larger than those that can be obtained in the city-state.
Buyers who spoke to SCMP are undeterred by the ringgit’s rising strength. The currency is now on track to achieve its longest winning streak in 14 years, due to a surge in foreign investments spurred by the country’s economy.
On Friday last week (Aug 2), the ringgit rose 1.6 per cent against the US dollar. This marked its tenth consecutive day of gains, in its longest run in over two decades, a reversal of three years of the currency’s decline.
In large part thanks to efforts from the government of Malaysia, foreign investors have poured US$112 million into Malaysian stocks so far this year.
Nevertheless, Singaporean property buyers are unmoved because of the strength of the Singapore dollar, one of the most traded currencies in Asia and worldwide.
Last month, The Independent Singapore reported that it is on track to be Asia’s best-performing currency for the third year in a row.
Therefore, property buyers in Johor are unmoved. With the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link, scheduled to begin operations by the end of 2026, travelling between Singapore and Malaysia will be easier than ever, with time of travel reduced to a mere 15 minutes.
Another factor causing Singaporeans to consider buying property in Johor is the high cost of living in the city-state. One buyer told SCMP that retirement in Singapore will likely mean downgrading from a standard of living residents have gotten used to.
“In Singapore, retirement means downsizing and downgrading, selling your car, moving from condos to HDB flats. It’s like everybody is downgrading to afford to retire,” SCP quoted a private tutor in her 50s who asked to only be referred to as “Tan.”
From October 2019 onward, the demand for residential homes for sale in Johor Bahru has consistently gone up, the country manager of Singapore at PropertyGuru, Tan Tee Khoon, told the Hong Kong news site.
By April of this year, more than two in five (44 per cent) of those searching for a residential property in Johor Bahru were from Singapore.
/TISG