SINGAPORE — Should the Kuala Lumpur-Singapore High Speed Rail (HSR) project – which had been touted as a game changer by Malaysia and Singapore leaders – be abolished, investors and homeowners in Jurong can no longer expect property prices to go up as quickly as they had hoped, said experts.
However, they believe that significant developments in the area such as the Jurong Lake District will help to bolster demand and prices in the long run.
On Monday (May 28), Singapore property owners, investors and developers were left reeling from Malaysian Prime Minister Mahathir Mohamad's declaration that he wants to scrap the multibillion-dollar rail project as part of measures to reduce his country’s national debt.
He told the Financial Times that they had to cut “unnecessary projects” such as the HSR which will cost the Malaysian government RM110 billion (S$37 billion) and not “earn us a single cent”. Singapore's Ministry of Transport said in response to media queries that it would await official confirmation.
[Fact Check: Previous estimates and published figures of the costs was RM50 - 60 billion. Dunno how Mahathir came up with RM110b. ]
Nevertheless, experts TODAY spoke to played down the impact of Malaysia’s about-turn on transportation infrastructure between both countries. They said that while the rail project would be a bonus in terms of offering faster and more reliable travel, the average commuter currently already has a number of alternatives to get to Kuala Lumpur.
However, there will be lost opportunities for businesses on both sides, said economists, as the project would have allowed for better economic and financial integration of both countries.
[From a news article; there is at least one study that suggests that:
"... major cities that host the terminus stations fare better, while the counties along the route of the high-speed rail saw 3 to 5 per cent declines in annual gross domestic product arising from a reduction of 9 to 11 per cent in fixed asset investment.So great for KL and SG, not so great for all the stops in-between.]
Maybank senior economist Chua Hak Bin said: “The HSR would have strengthened the economic and financial integration of both countries. This would have facilitated the convergence of wages and expanded the markets for companies.
“This will be a huge setback as lowering transport and connectivity costs would boost trade and increase the flow of talent both ways.”
In terms of the property market, return of investments in Jurong is expected to take longer, and buyers who were banking on rentals to Malaysian workers and tourists will have to adjust their expectations, said property analysts after Dr Mahathir’s announcement on Monday.
“Those who bought property in the Jurong area with the purpose of investment would be disappointed as their investments might only bear them good gains many years later,” said International Property Advisor's chief executive officer, Mr Ku Swee Yong.
[Define "many years".]
“Others who might have invested in small retail units, and are banking on the day trippers from Malaysia to boost sales may also have to adjust their sales expectations drastically.”
“Many people expected the high-speed rail to turn Jurong around completely, so there will be some impact on prices, but perhaps in the short term,” said Mr Chris Koh, director of property firm Chris Koh International.
[Jurong needs to be turned around completely? Wow. I did not know it was in the boondocks. Why are there so many malls in the boondocks? IMM. JCube. JEM. Westgate. BigBox. And Ng Teng Fong General Hospital. And this is not even considering the Jurong Lake District plans. And no. the JLD was not conceived to leverage on the HSR terminus. The JLD plans were made as early as 2008. And so it was the HSR terminus that was shoehorned into the JLD plans not the other way around. And so no, the JLD and the Jurong Gateway segment (comprising JEM, Westgate, BigBox, JCube, and IMM) are already completed. ]
“The appreciation of prices may not be at such a rapid pace than expected.”
However, experts said that the impact on property prices and buyer interest is likely to be short term, with demand and prices expected to pick up as the region is set to be rejuvenated as Singapore’s “second financial district”.
The masterplan for the Jurong Lake District was first released in 2008 as part of the Urban Redevelopment Authority’s efforts to grow new employment centres outside the Central Business District to bring more quality jobs and recreational options closer to homes. The HSR project was officially agreed between Singapore and Malaysia in 2013.
[Finally, some facts!]
ZACD Group executive director Nicholas Mak said: “The health of the property market in Jurong does not depend on the high-speed rail terminus.
“The region has its own attractions such as the MRT interchange, new Jurong Regional Line, shops, offices and business park that provide jobs and services... all these come about without the high-speed rail.”
Plans for residential and commercial developments are also unlikely to be redrawn, given that they were conceptualised before plans to build the high-speed rail, said experts.
The Singapore Government first laid out its blueprint for the Jurong Lake District in 2008 as part of the Urban Redevelopment Authority’s efforts to grow new employment centres outside the Central Area to bring more quality jobs and recreational options closer to homes.
First discussions for the HSR began in 2013 between Prime Minister Lee Hsien Loong and his former Malaysian counterpart Najib Razak, before the bilateral agreement was signed in December 2016.
Overall, buyers and developers will be more conservative going forward, said analysts.
“Developers will be a lot more careful and less aggressive with their bid price going forward,” said Mr Ku.
Mr Koh added: “If I’m a developer, I will not be banking on the high-speed rail to market property anymore, but I would rather sell the other merits of Jurong such as the Jurong lake district and other amenities in the region.”
The HSR, which would have cut down the travel time between Kuala Lumpur and Singapore to 90 minutes, would have provided a better travel option for commuters, said transport experts. However, while they felt it was a “good thing to have”, its loss will not be so keenly felt.
“The project was never about expanding travel capacity between the capitals, it was about providing a better travel option than air and road,” said Singapore University of Social Sciences (SUSS) transport economist Walter Theseira.
“Certainly there will be some integration between the high-speed rail and the Jurong East area, but I doubt our rail projects like the Jurong Regional Line will be affected as our MRT plans are not conceptualised to hinge on the HSR project.”
SUSS’s urban transport expert Park Byung Joon said that minor operational adjustments to connecting trains running from the Jurong East terminus might have to be made as there would be less human traffic.
Dr Park added: “Overall, it’s a good thing to have, (but) it hasn’t happened yet so there is no real loss.”
Some Singaporeans were dismayed to hear about the cancellation of the rail project.
Singaporean resident Shayne Ow, 24, is engaged to a Malaysian who lives in Kuala Lumpur. She said: “I am disappointed with the cancellation as it would have been more convenient for me and my fiance to travel back to Malaysia during important days like Chinese New Year when a four hour bus ride can take up to 12 hours due to traffic jams.”
[Ok. That's it. Life is over. The dream is over. The good time's over. The ride is over. We are doom doom doom. ]
Others, however, said they are not too bothered by the scrapping of the HSR project as they do not commute to Malaysia often.
Jurong resident Tan Jie Yong, 25, said: “I don’t think it affects me much because I don’t go to Malaysia often.”
But others like Miao Tian, 30, said that the HSR would be a more convenient travel option as compared to buses.
The civil servant was not too concerned about property prices dipping. She added: “I bought my flat with the sole purpose of living in it, so I did not expect the price to rise.”
Some experts also cast doubt on whether the project is really dead in the water.
Dr Theseira said: “I don’t think the project is dead permanently, for all we know, the project could be revived when Anwar takes over in two years’ time.”
He also added that in the long run, as countries in the region become more affluent and trade increases, an “upgraded rail line” that provides connectivity would be “an obvious infrastructure project that all (Asean) countries would be interested in, if the price was right”.
Agreeing, Dr Chua added: “Malaysia may revisit the project once fiscal finances are in a healthier state.”
Jurong East residents, businesses concerned with impact of HSR no-go
SINGAPORE — A day after Malaysia announced it intends to scrap the Kuala Lumpur-Singapore High Speed Rail (HSR) project, the phones of property agents Anthony Chua and Eugene Wong were buzzing with calls from worried clients who were concerned with its impact on property prices near the proposed Jurong East terminus.
Some customers, who had forked out as much as S$200,000 in down payments for properties in that area, even accused the agents and developers of misleading them, said Mr Chua, an agent with SLP Scotia.
Explaining to customers that Malaysia's U-turn came as a bolt out of the blue, Mr Wong of ERA Realty pointed out that, given the Government's plans for a vibrant Jurong Lake District, the area still has a lot of potential — with or without the HSR.
"But it's just the second day, so the ripple effect (on the property prices) may not be so (obvious) yet," he said.
Touted as Singapore's second business district, the masterplan for the Jurong Lake District was first released in 2008 as part of the Urban Redevelopment Authority's efforts to grow new employment centres outside the Central Business District to bring more quality jobs and recreational options closer to homes.
The HSR project was officially agreed between Singapore and Malaysia in 2013, with Jurong East earmarked as the terminus in Singapore, adding to the anticipation of a vibrant district.
The proposed terminus will occupy part of the current Jurong Country Club site which had been acquired by the Government.
A slew of condominium projects were launched around the area over the last few years, such as the CSC Land's Twin Vew and EI Development's Parc Riviera in West Coast Vale, as well as MCL Land's J Gateway condo in Jurong East. They are all within a 15-minute walk from the proposed site for the terminus.
When TODAY visited the residential areas near the site for the proposed HSR terminus at Jurong East on Tuesday (May 29), some homeowners expressed shock and disappointment that the HSR project is off the table.
For Nanyang Technological University's Assistant Professor Althaf Marsoof, a resident at the Ivory Heights condominium which is in talks for an en bloc sale, the news poses even more uncertainty.
If the project is called off, there is a "greater possibility" that owners and residents would consent to the en bloc sale and be pushing to sell the development faster before the market turns, he said. "(But) arguably, if the project materialises, the property value will increase," said Prof Marsoof, who teaches at the Nanyang Business School.
A resident of J Gateway — who only wants to be known as Ms Ling — had forked out over S$1 million for her apartment. Facing a potential drop in the price of her property, the 35-year-old said she might consider moving to the East instead.
Young couples who have bought Build-to-Order flats of the upcoming Tengah new town also expressed concerns that the absence of HSR might dampen the appeal of the area, which is located a 20 minute-drive away from the proposed Jurong East terminus.
"With the HSR, it would increase (the property value), and the area will be buzzing," said resident Mrs Koh, 26, who added that the HSR was a unique selling point for some young homeowners like herself.
[Translation: "Young homeowners" = "don't know any better".]
"But now we don't know how that's going to affect the future prospects of Jurong East… Without (the HSR), the area may be quite sleepy."
[Right. No one wants to live in a sleepy residential area. WE WANT BUZZ! 24 hours Starbucks!]
Many were also looking forward to the added convenience of travelling to Malaysia on the HSR. A Jurong resident in her 40s, who makes monthly trips to Johor Baru and Kuala Lumpur, expressed disappointment. "It's just too bad," she said.
However, the majority of residents and property agents were more sanguine about the possible repercussions, and were optimistic that it would not affect upcoming developments.
The HSR decision may give undecided buyers "another excuse to sit harder on the fence", said a property agent, who declined to be named.
[We can sit harder on the fence? What if it is a spiked fence?]
"But we are sold on the Jurong Lake District story because the Government is still making significant investments in the area," he pointed out.
"The Government doesn't seem to be pulling back or rethinking its investments. The HSR is significant, but it's just one part of the whole picture."
Businesses looking to cash in on the increased footfall from Malaysian visitors were just as disappointed.
Madam Zaiton, 67, who runs a Malay clothing store at neighbourhood mall JCube, said she might consider consolidating her business in Singapore and concentrate on her two other stores in Johor Baru.
Some, like Madam Neo, 55, doubted if the HSR would actually bring more traffic to her shop, citing the bleak economic climate. "I'm not sure how the future will pan out, so we are just taking things one step at a time," she said in Mandarin.
Another store owner in JCube, who declined to be named, said she has suffered a 30 per cent drop in earnings since last year. She also noted that business was even slower during this month's Malaysian General Elections.
"Business is already quite bad, so (even) with the HSR, things may not improve," she said.