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In Dec 2021, the U.S. Congress approved raising the federal government's debt limit by $2.5 trillion, to about $31.4 trillion, will they raise it by another $2.5 trillion next month?
On 1 May, US Treasury Secretary Janet Yellen warned the United States of America could default on its gigantic debt obligations by the 1st week of June 2023 if US Congress doesn’t raise the huge debt ceiling / limit before then. The pressure is on President Biden and House Republican lawmakers to ramp up their debt ceiling discussions after months of talks being at a standstill.
What is the U.S. Debt Ceiling / Limit
The U.S. debt ceiling, also known as the debt limit, refers to the maximum amount of debt that the United States government can legally borrow to finance its operations and meet its financial obligations. It is a statutory limit set by Congress. On December 16, 2021, US lawmakers raised the debt limit by $2.5 trillion to a total of USD$31.4 trillion and the U.S. hit that debt ceiling limit of USD$31.4 trillion within 13 months by 19 January 2023.
The debt ceiling / limit is determined by Congress through the legislative process. It represents a legal cap on the total amount of debt that the US government can borrow or the maximum amount of Treasury securities the government can issue to borrow money. When the government needs to borrow money to cover its expenses, it issues Treasury securities (bonds, notes, and bills) to investors, financial institutions, and foreign governments.
The debt ceiling / limit is closely tied to the functioning of the federal government. If the debt ceiling / limit is not raised by the first week of June, the government may face difficulties in financing its operations, paying its bills, and meeting its financial obligations, including interest payments on existing debt, salaries, and entitlement programs.
What is the U.S. Debt Ceiling / Limit
The U.S. debt ceiling, also known as the debt limit, refers to the maximum amount of debt that the United States government can legally borrow to finance its operations and meet its financial obligations. It is a statutory limit set by Congress. On December 16, 2021, US lawmakers raised the debt limit by $2.5 trillion to a total of USD$31.4 trillion and the U.S. hit that debt ceiling limit of USD$31.4 trillion within 13 months by 19 January 2023.
The debt ceiling / limit is determined by Congress through the legislative process. It represents a legal cap on the total amount of debt that the US government can borrow or the maximum amount of Treasury securities the government can issue to borrow money. When the government needs to borrow money to cover its expenses, it issues Treasury securities (bonds, notes, and bills) to investors, financial institutions, and foreign governments.
The debt ceiling / limit is closely tied to the functioning of the federal government. If the debt ceiling / limit is not raised by the first week of June, the government may face difficulties in financing its operations, paying its bills, and meeting its financial obligations, including interest payments on existing debt, salaries, and entitlement programs.
What happens if U.S. Defaults On Its Debt Obligations?
In the event of a US debt default, it could have significant repercussions for both the United States and the global economy. While it is challenging to predict the exact outcomes, it is widely believed that a US debt default would likely have severe consequences and could potentially unleash global chaos. Here are a few reasons why:
"Although the United States has a ginormous amount of outstanding debt exceeding USD$30 trillion, it's debt-to-GDP ratio is only about 140% of its annual GDP which is considered alright for a currency that is being used as the world's reserve currency. The U.S. debt-to-GDP ratio has been on an upward trend over the years, primarily driven by factors such as budget deficits, government borrowing, and economic conditions" said real estate professional Kiwi Lim, "although most countries have an average of 60% to 70% debt-to-GDP ratio, it is worth noting that the United States as a developed economy with the U.S. dollar being the global reserve currency, has unique characteristics that allows it to manage and sustain higher levels of debt compared to other countries".
To summarise, failure to raise the debt ceiling / limit could result in a default on US debt obligations, which could have severe consequences for the economy and financial markets. Given the United States' central role in the global economy, a default would likely have significant and far-reaching consequences that could potentially unleash global financial chaos.
In the event of a US debt default, it could have significant repercussions for both the United States and the global economy. While it is challenging to predict the exact outcomes, it is widely believed that a US debt default would likely have severe consequences and could potentially unleash global chaos. Here are a few reasons why:
- Global Financial Markets: The US dollar is the world's primary reserve currency, and US Treasury securities are considered a safe haven investment. A default on US debt would undermine the confidence in these assets, causing significant turmoil in global financial markets. It could lead to a sharp decline in the value of the US dollar, increased borrowing costs for governments and businesses worldwide, and widespread market volatility.
- Global Trade and Investments: The United States plays a central role in the global economy, and its economic stability and credibility are vital for international trade and investments. A debt default could disrupt international transactions, reduce investor confidence, and trigger a decline in global trade. It could also affect the stability of financial institutions worldwide and create ripple effects throughout the global supply chain.
- International Relations: The United States holds a unique and important position as a global superpower and a debt default may damage its reputation as a reliable and responsible economic powerhouse. This could have far-reaching geopolitical consequences, potentially undermining US influence and altering the dynamics of international relations.
- Confidence and Sentiment: Confidence and sentiment are very very crucial factors in the functioning of the global economy. A US debt default would send powerful shockwaves through the global financial system, eroding trust and creating uncertainty and instability worldwide. This loss of confidence could have cascading effects on consumer and investor behavior, leading to decreased spending, lower economic growth, and cause a worldwide recession.
"Although the United States has a ginormous amount of outstanding debt exceeding USD$30 trillion, it's debt-to-GDP ratio is only about 140% of its annual GDP which is considered alright for a currency that is being used as the world's reserve currency. The U.S. debt-to-GDP ratio has been on an upward trend over the years, primarily driven by factors such as budget deficits, government borrowing, and economic conditions" said real estate professional Kiwi Lim, "although most countries have an average of 60% to 70% debt-to-GDP ratio, it is worth noting that the United States as a developed economy with the U.S. dollar being the global reserve currency, has unique characteristics that allows it to manage and sustain higher levels of debt compared to other countries".
To summarise, failure to raise the debt ceiling / limit could result in a default on US debt obligations, which could have severe consequences for the economy and financial markets. Given the United States' central role in the global economy, a default would likely have significant and far-reaching consequences that could potentially unleash global financial chaos.
Will The U.S. Default On Its Huge Debt Next Month?
The United States has never defaulted on its debt. Throughout its history, the United States has always honored its debt obligations, and the U.S. government considers the payment of its debts a top priority, although there have been periods of debt ceiling debates and negotiations. Meeting its debt obligations established the U.S. Treasury securities as one of the world's most reliable and trusted investments.
Market watcher Kiwi Lim believe the American Congress will eventually reach a consensus to raise their immense debt ceiling / limit further upwards by about USD$2.5 trillion to prevent a debt default that may potentially impact global confidence in the US dollar as a reserve currency and countries may seek alternative options and diversify the currency exposure of their reserves to other currencies like the Chinese yuan (renminbi) as an alternative.
"Of course this does not mean the Chinese yuan (renminbi) will take over the US dollar anytime soon as the world's reserve currency because the internationalisation of a currency like the yuan involves many many factors, including economic stability, liquidity, openness of financial markets, trade sanctions and political considerations" explained Kiwi, "but it is important to note that the Chinese yuan has been gradually gaining recognition as an international currency in recent years with more than 40 countries supporting the call for the Chinese Yuan to be accepted as the "petrodollar" in international oil trade especially when China is one of the largest importers of oil globally playing a significant role in international oil markets"
While the yuan is not the primary currency used in oil transactions, China has been working to internationalize its currency and promote its use in global trade, including the energy sector. but it still has some way to go before reaching the same level of global acceptance and trust as the US dollar.
The United States has never defaulted on its debt. Throughout its history, the United States has always honored its debt obligations, and the U.S. government considers the payment of its debts a top priority, although there have been periods of debt ceiling debates and negotiations. Meeting its debt obligations established the U.S. Treasury securities as one of the world's most reliable and trusted investments.
Market watcher Kiwi Lim believe the American Congress will eventually reach a consensus to raise their immense debt ceiling / limit further upwards by about USD$2.5 trillion to prevent a debt default that may potentially impact global confidence in the US dollar as a reserve currency and countries may seek alternative options and diversify the currency exposure of their reserves to other currencies like the Chinese yuan (renminbi) as an alternative.
"Of course this does not mean the Chinese yuan (renminbi) will take over the US dollar anytime soon as the world's reserve currency because the internationalisation of a currency like the yuan involves many many factors, including economic stability, liquidity, openness of financial markets, trade sanctions and political considerations" explained Kiwi, "but it is important to note that the Chinese yuan has been gradually gaining recognition as an international currency in recent years with more than 40 countries supporting the call for the Chinese Yuan to be accepted as the "petrodollar" in international oil trade especially when China is one of the largest importers of oil globally playing a significant role in international oil markets"
While the yuan is not the primary currency used in oil transactions, China has been working to internationalize its currency and promote its use in global trade, including the energy sector. but it still has some way to go before reaching the same level of global acceptance and trust as the US dollar.
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China's "common prosperity" is a term that has gained prominence in recent years as a key policy objective after Chinese President Xi Jinping introduced the concept of common prosperity at the 10th meeting of the Central Committee for Financial and Economic Affairs in August 2021.
At the 2021 meeting, President Xi announced he will be pushing for common prosperity - raising the incomes of low-income groups, promoting fairness, making regional development more balanced, and stressing people-centered growth. President Xi pledged to “reasonably regulate excessively high incomes, and encourage high-income people and enterprises to return more to society.”
Common prosperity
Common prosperity refers to the goal of achieving a more equitable distribution of wealth and ensuring that the benefits of China's economic development are shared by a wider segment of the population. While China has experienced significant economic growth that lifted hundreds of millions of people out of poverty over the past few decades, income inequality has also increased greatly, leading to concerns about rising social unrest among a population of more than 1.4 billion spread over a sprawling land area covering five time zones and bordering 14 countries by land - the most of any country in the world.
To address these social concerns, the Chinese government has outlined a series of measures aimed at promoting common prosperity. These measures include:
At the 2021 meeting, President Xi announced he will be pushing for common prosperity - raising the incomes of low-income groups, promoting fairness, making regional development more balanced, and stressing people-centered growth. President Xi pledged to “reasonably regulate excessively high incomes, and encourage high-income people and enterprises to return more to society.”
Common prosperity
Common prosperity refers to the goal of achieving a more equitable distribution of wealth and ensuring that the benefits of China's economic development are shared by a wider segment of the population. While China has experienced significant economic growth that lifted hundreds of millions of people out of poverty over the past few decades, income inequality has also increased greatly, leading to concerns about rising social unrest among a population of more than 1.4 billion spread over a sprawling land area covering five time zones and bordering 14 countries by land - the most of any country in the world.
To address these social concerns, the Chinese government has outlined a series of measures aimed at promoting common prosperity. These measures include:
- Wealth redistribution: policies to redistribute wealth by imposing higher taxes on the wealthy & high-income individuals to regulate excessive income in certain sectors as well as supporting social welfare programs.
- Poverty alleviation: China has made significant progress in poverty reduction, and continues to focus on eliminating absolute poverty. Efforts include targeted poverty alleviation programs, investment in rural areas, and improving access to education, healthcare, and basic infrastructure.
- Rural revitalization: Xi's government aims to bridge the urban-rural wealth gap by promoting rural development, improving agricultural productivity, and providing support for rural industries and infrastructure with initiatives to modernize agriculture, increase rural incomes, and improve living conditions in rural areas.
- Social welfare reforms: Reforms to the healthcare system, pension system, and social insurance programs to provide better access to essential services and protect individuals and families from financial risks as the China government works to expand its social safety net.
- Regulation of wealth accumulation: Measures to curb excessive wealth accumulation and address monopolistic practices will be introduced by the Chinese government, e.g. increased scrutiny of large corporations and technology companies, antitrust regulations, and measures to protect the rights and interests of workers.
Dual Circulation Strategy
To counter widening socioeconomic inequality in China, the Chinese government is also putting its focus to its “security” drive in addition to its “common prosperity” drive by pushing for the “dual circulation” strategy to the party constitution with the aim of narrowing socioeconomic inequality as protests against the rich and powerful mount at home.
China's dual circulation strategy, aka "dual circulation development pattern", introduced in 2020 seeks to strike a balance between domestic and international factors, with greater emphasis on domestic drivers of growth with the ultimate aim to rebalance China's economy and promote sustainable long-term growth by focusing on two main components: domestic circulation and international circulation.
China understands the importance of external markets while emphasizing the need for self-reliance. China is not decoupling from the global economy but is bracing itself against global headwinds gaining strength in Europe and America by pursuing “high-quality development” in terms of technological advancements and domestic innovation to ensure long-term economic resilience and stability that will impress the western countries.
To counter widening socioeconomic inequality in China, the Chinese government is also putting its focus to its “security” drive in addition to its “common prosperity” drive by pushing for the “dual circulation” strategy to the party constitution with the aim of narrowing socioeconomic inequality as protests against the rich and powerful mount at home.
China's dual circulation strategy, aka "dual circulation development pattern", introduced in 2020 seeks to strike a balance between domestic and international factors, with greater emphasis on domestic drivers of growth with the ultimate aim to rebalance China's economy and promote sustainable long-term growth by focusing on two main components: domestic circulation and international circulation.
- Domestic circulation: This strategy seeks to boost domestic demand, stimulate consumer spending, and reduce reliance on exports and external demand as the primary drivers of economic growth. It emphasizes developing a strong domestic industrial base, improving infrastructure, promoting urbanization, and fostering innovation to drive consumption-led growth.
- International circulation: China aims to optimize its international economic relationships, enhance its competitiveness, and pursue mutually beneficial trade and investment opportunities while safeguarding its national interests. This strategic component focus on external markets and engagement with the global economy by expanding foreign trade, attracting foreign investment, and enhancing China's integration into global value chains.
China understands the importance of external markets while emphasizing the need for self-reliance. China is not decoupling from the global economy but is bracing itself against global headwinds gaining strength in Europe and America by pursuing “high-quality development” in terms of technological advancements and domestic innovation to ensure long-term economic resilience and stability that will impress the western countries.
How does China's common prosperity drive affect Singapore?
President Xi is prepared to sacrifice China's economic growth to realise his target of gradually achieving common prosperity for the general population. In fact, the concept of common prosperity is already deeply etched in the Chinese Communist Party's ideology, which emphasized the pursuit of social equality and the welfare of the people. Wealthy families in mainland China are very wary of President Xi's common prosperity drive and are worried that income and wealth taxes may rise to extremely high levels in China. Many have already started or planning to shift their wealth overseas or relocating to other countries in order to preserve their immense wealth.
"With the Covid situation under control in mainland China and economic growth stabilizing after the gradual relaxation of strict Covid lockdowns, I believe President Xi may find it a suitable time to push ahead with his common prosperity drive this year." said Kiwi Lim.
President Xi is prepared to sacrifice China's economic growth to realise his target of gradually achieving common prosperity for the general population. In fact, the concept of common prosperity is already deeply etched in the Chinese Communist Party's ideology, which emphasized the pursuit of social equality and the welfare of the people. Wealthy families in mainland China are very wary of President Xi's common prosperity drive and are worried that income and wealth taxes may rise to extremely high levels in China. Many have already started or planning to shift their wealth overseas or relocating to other countries in order to preserve their immense wealth.
"With the Covid situation under control in mainland China and economic growth stabilizing after the gradual relaxation of strict Covid lockdowns, I believe President Xi may find it a suitable time to push ahead with his common prosperity drive this year." said Kiwi Lim.
Recently after the recent hikes in foreigner's additional buyer’s stamp duty (ABSD) from 30% to 60% came into effect on 27 April 2023, two luxury condo units in prime District 9 were purchased by foreign buyers - Chinese nationals.
One of the properties is a four-bedroom, 2,691 sqft unit at New Futura, a freehold condo along Leonie Hill Road in District 9 for $12.5 million or $4,645 psf setting a new psf-price high for the 124-unit by developer City Developments Ltd. The other was also another freehold luxury condo - a 7,718 sqft six-bedroom townhouse unit at Yong An Park on River Valley Road sold for $14.08 million or $1,824 psf.
The number of wealthy families from mainland China setting up family offices here in Singapore have been growing and may have exceeded 1,000 family offices by mid of this year as they shift their funds out of Xi's reach in his common prosperity drive, due to increasing global uncertainty, geopolitical risks and Singapore's reputation as a safe haven for wealth and attractive tax incentives even after the MAS set stricter criteria for assets under management, local investments and business spending for family offices to qualify for tax incentives last year.
"Many wealthy families plan to relocate out of China and the recent property cooling measure in Singapore where the ABSD for foreigners buying residential real estate in Singapore was increased from 30% to 60% may have little impact on their plans to move to Singapore." explained Kiwi Lim.
One of the properties is a four-bedroom, 2,691 sqft unit at New Futura, a freehold condo along Leonie Hill Road in District 9 for $12.5 million or $4,645 psf setting a new psf-price high for the 124-unit by developer City Developments Ltd. The other was also another freehold luxury condo - a 7,718 sqft six-bedroom townhouse unit at Yong An Park on River Valley Road sold for $14.08 million or $1,824 psf.
The number of wealthy families from mainland China setting up family offices here in Singapore have been growing and may have exceeded 1,000 family offices by mid of this year as they shift their funds out of Xi's reach in his common prosperity drive, due to increasing global uncertainty, geopolitical risks and Singapore's reputation as a safe haven for wealth and attractive tax incentives even after the MAS set stricter criteria for assets under management, local investments and business spending for family offices to qualify for tax incentives last year.
"Many wealthy families plan to relocate out of China and the recent property cooling measure in Singapore where the ABSD for foreigners buying residential real estate in Singapore was increased from 30% to 60% may have little impact on their plans to move to Singapore." explained Kiwi Lim.
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Artist’s impression of the Johor Bahru-Singapore Rapid Transit System (RTS) Link Woodlands North Station.
Yesterday on 11 May (Thursday) 2023, Singapore’s Transport Minister S Iswaran said that construction on the Singapore side for the Johor Bahru-Singapore Rapid Transit System (RTS) Link project was around 50% completed. The Malaysian Transport Minister Anthony Loke also announced that the construction on the Malaysia side was around a third complete and is on track to be completed by end-2026.
The JB-Singapore RTS Link:
Under the mutual agreement inked, the 4.2km Johor Bahru-Singapore Rapid Transit System (RTS) Link will have only two stations connecting both countries – the Singapore terminus will be located at the Woodlands North station (which will have a combined gross floor area approximately 10 times that of a typical MRT station) and the Malaysia terminus at the Bukit Chagar station. The CIQ (customs, immigration, quarantine) facilities of both countries will be co-located at the Woodlands North and Bukit Chagar stations, which means passengers only need to clear immigration authorities once - at their point of departure.
Upon completion, the Johor Bahru-Singapore Rapid Transit System (RTS) Link will be the second rail link between the two countries after the KTM Intercity Shuttle Tebrau. The RTS Link is also expected to replace the railway line and shuttle train services between JB Sentral and Woodlands Train Checkpoint.
The Johor Bahru-Singapore Rapid Transit System (RTS) Link aims to connect Bukit Chagar in Johor Bahru city to Woodlands in Singapore, serving about 10,000 passengers per hour each way to help ease traffic congestion on the Causeway - with the waiting time for the trains expected to be about 4 minutes during peak, and 8 minutes during non-peak periods.
The RTS Link Woodlands North station will connect commuters to the Thomson-East Coast Line (TEL) Woodlands North MRT station as well as a CIQ building. Once operational, the train will take five minutes to travel one way between Woodlands North station and Bukit Chagar station. It is expected to serve about 10,000 passengers per hour each way to help ease traffic congestion on the Causeway.
The completion of the Johor Bahru-Singapore Rapid Transit System (RTS) Link could have a positive influence in areas near the transit station especially on the Johor property market as well as the HDB flats and private residential homes located in Woodlands, Singapore.
The JB-Singapore RTS Link:
Under the mutual agreement inked, the 4.2km Johor Bahru-Singapore Rapid Transit System (RTS) Link will have only two stations connecting both countries – the Singapore terminus will be located at the Woodlands North station (which will have a combined gross floor area approximately 10 times that of a typical MRT station) and the Malaysia terminus at the Bukit Chagar station. The CIQ (customs, immigration, quarantine) facilities of both countries will be co-located at the Woodlands North and Bukit Chagar stations, which means passengers only need to clear immigration authorities once - at their point of departure.
Upon completion, the Johor Bahru-Singapore Rapid Transit System (RTS) Link will be the second rail link between the two countries after the KTM Intercity Shuttle Tebrau. The RTS Link is also expected to replace the railway line and shuttle train services between JB Sentral and Woodlands Train Checkpoint.
The Johor Bahru-Singapore Rapid Transit System (RTS) Link aims to connect Bukit Chagar in Johor Bahru city to Woodlands in Singapore, serving about 10,000 passengers per hour each way to help ease traffic congestion on the Causeway - with the waiting time for the trains expected to be about 4 minutes during peak, and 8 minutes during non-peak periods.
The RTS Link Woodlands North station will connect commuters to the Thomson-East Coast Line (TEL) Woodlands North MRT station as well as a CIQ building. Once operational, the train will take five minutes to travel one way between Woodlands North station and Bukit Chagar station. It is expected to serve about 10,000 passengers per hour each way to help ease traffic congestion on the Causeway.
The completion of the Johor Bahru-Singapore Rapid Transit System (RTS) Link could have a positive influence in areas near the transit station especially on the Johor property market as well as the HDB flats and private residential homes located in Woodlands, Singapore.
Benefits of the JB-Singapore RTS Link:
The Johor Bahru-Singapore Rapid Transit System (RTS) Link offers several benefits for commuters, businesses, and the overall connectivity between Johor Bahru and Singapore. Here are some of the potential advantages of the RTS Link:
The Johor Bahru-Singapore Rapid Transit System (RTS) Link offers several benefits for commuters, businesses, and the overall connectivity between Johor Bahru and Singapore. Here are some of the potential advantages of the RTS Link:
- Reduced Travel Time: The Johor Bahru-Singapore Rapid Transit System (RTS) Link aims to significantly reduce travel time between Johor Bahru and Singapore. The shuttle trains running on the dedicated rail line will provide a faster and more efficient mode of transportation, saving valuable time for commuters who regularly travel between the two cities.
- Enhanced Cross-Border Connectivity: The Johor Bahru-Singapore Rapid Transit System (RTS) Link will enhance cross-border connectivity by providing a seamless and convenient transit option. Commuters will be able to avoid traffic congestion at land checkpoints, resulting in a smoother and more predictable travel experience.
- Increased Capacity: The Johor Bahru-Singapore Rapid Transit System (RTS) Link will help alleviate the strain on existing border crossings by increasing the transportation capacity between Johor Bahru and Singapore. This will accommodate a larger volume of commuters and contribute to more efficient cross-border movement.
- Strengthened Economic Integration: The improved connectivity through the Johor Bahru-Singapore Rapid Transit System (RTS) Link is expected to strengthen economic integration between Johor Bahru and Singapore. It will facilitate easier movement of people, goods, and services, fostering greater collaboration, trade, and business opportunities on both sides of the border.
- Boost to Tourism: The Johor Bahru-Singapore Rapid Transit System (RTS) Link could have a positive impact on tourism in both Johor Bahru and Singapore. It will make it more convenient for tourists to explore attractions and destinations in both cities, promoting cross-border tourism and boosting the tourism industry in the region.
- Development and Investment Opportunities: The Johor Bahru-Singapore Rapid Transit System (RTS) Link has the potential to spur development and investment in areas near the transit stations. Improved connectivity often leads to increased property values and the development of supporting infrastructure and amenities, creating potential investment opportunities and enhancing the quality of life for residents.
The Johor Bahru-Singapore Rapid Transit System (RTS) Link could improve connectivity and accessibility, making it easier for people to travel between Johor and Singapore leading to an influx of commuters and potential buyers or renters looking for cheaper and more affordable housing options in Johor. This increased demand could potentially drive up property prices and spur development and investment in the area probably within a radius of 5km from the RTS station.
Real estate professional Kiwi Lim believe the JB-Singapore RTS Link project has the potential to positively impact the property market in Johor Bahru, Malaysia and probably even Woodlands in Singapore, particularly in areas near the transit stations. The increased accessibility, connectivity and convenience provided by the RTS may attract some Singaporeans to relocate to Johor as the cheaper property prices and lower cost of living in Johor may appeal to some Singaporean investors and homebuyers.
"However, while the completion of the Johor Bahru-Singapore Rapid Transit System (RTS) Link could be a positive factor, the real estate market is influenced by many factors, including economic conditions, government policies, market sentiment, and overall demand and supply dynamics. Even though Malaysia remain fully committed to the delivery of Johor Bahru-Singapore Rapid Transit System (RTS) Link at this moment, possible political issues may arise to stall this project”" said Kiwi Lim
Real estate professional Kiwi Lim believe the JB-Singapore RTS Link project has the potential to positively impact the property market in Johor Bahru, Malaysia and probably even Woodlands in Singapore, particularly in areas near the transit stations. The increased accessibility, connectivity and convenience provided by the RTS may attract some Singaporeans to relocate to Johor as the cheaper property prices and lower cost of living in Johor may appeal to some Singaporean investors and homebuyers.
"However, while the completion of the Johor Bahru-Singapore Rapid Transit System (RTS) Link could be a positive factor, the real estate market is influenced by many factors, including economic conditions, government policies, market sentiment, and overall demand and supply dynamics. Even though Malaysia remain fully committed to the delivery of Johor Bahru-Singapore Rapid Transit System (RTS) Link at this moment, possible political issues may arise to stall this project”" said Kiwi Lim
Foreigners buying property / real estate in Johor, Malaysia (Table information extracted from iProperty.com)
Foreigners Buying Property in Johor, Malaysia
Generally speaking, a minimum purchase value of RM1 million is applied to all kinds of property in almost every Malaysian state including Johor (see above table), except for 3 states. Therefore, as a foreigner in Malaysia, we won’t be able to purchase the following:
Take note, if you’re a Singaporean citizen and own an HDB flat, you will need to meet your Minimum Occupation Period (MOP) before you can buy property in Malaysia. Owning a property in Malaysia may also affect your buying of a HDB flat in Singapore.
Singaporeans who are looking to buy properties in Johor should conduct thorough research on the suitability of relocating to Johor, i.e. schools, safety of the neighborhood, etc. and consider various factors like currency fluctuations that may affect property values as well as political and market conditions in Malaysia. Remember to consider factors such as budget, loan, approved real estate, desired property type (apartment, landed house, etc.), size, amenities, and proximity to other essential facilities when searching for properties near the RTS Johor. It's also advisable to visit the area in person to get a better sense of the location and its surroundings before making any final decisions.
"It's important to note that even with the anticipated benefits of the JB-Singapore RTS Link project, as with any major infrastructure project, the actual impact and benefits may vary once the system is operational." said Kiwi.
Generally speaking, a minimum purchase value of RM1 million is applied to all kinds of property in almost every Malaysian state including Johor (see above table), except for 3 states. Therefore, as a foreigner in Malaysia, we won’t be able to purchase the following:
- Bumi lots (Land reserved for Bumiputeras)
- Agricultural land (Exceptions can be made if the land is over 5 acres and will be used for commercial purposes)
- Malay reserved land (Land that can only be sold exclusively to Malays)
- Property with a valuation below RM 1 million
Take note, if you’re a Singaporean citizen and own an HDB flat, you will need to meet your Minimum Occupation Period (MOP) before you can buy property in Malaysia. Owning a property in Malaysia may also affect your buying of a HDB flat in Singapore.
Singaporeans who are looking to buy properties in Johor should conduct thorough research on the suitability of relocating to Johor, i.e. schools, safety of the neighborhood, etc. and consider various factors like currency fluctuations that may affect property values as well as political and market conditions in Malaysia. Remember to consider factors such as budget, loan, approved real estate, desired property type (apartment, landed house, etc.), size, amenities, and proximity to other essential facilities when searching for properties near the RTS Johor. It's also advisable to visit the area in person to get a better sense of the location and its surroundings before making any final decisions.
"It's important to note that even with the anticipated benefits of the JB-Singapore RTS Link project, as with any major infrastructure project, the actual impact and benefits may vary once the system is operational." said Kiwi.
