South Johor Economic Region #3: Developer:" Why do i find it tough to sell my project?"

Many developers in Johor especially, have been struggling to dispose of their launched housing project. Why? Many old timer Johor developers found themselves left with hundreds of unsold units idling, again the same question, why? Isn't the Iskandar Development Region bringing a boast onto Johor Bahru's property market already?

To answer the above questions in the residential housing context, the answer is simple:

(1)there is an imbalance between the supply and demand in the local market.

For your information, the population growth for SJER is only approximately 4.1%p.a.[1] but the approved new housing schemes is 4.3%p.a.[2] for Johor state, and majority of it is in south johor!

At one glance, people might ask me, hey, isn't that a balance you are giving here? Please allow me to further feed you with the following information, do not forget that Johor state has already the most overhang properties in the whole Malaysia, we are already in a suplus for many years, without being able to resolve the overhang issues, but at the sametime building more than our population growth, you tell me, what will be the consequences in the end of the day.

To add things worse, all locals wanted to sell their existing old house and buy/move over to their new houses with all the stylist looks , security and peaceful environment, who's going to take up all the existing old houses? We have seen this trend of decentralisation from Johor Bahru City Central going on for the past few years and it is moving fast.

(2) I hardly hear any developer asking this question, what do Johorean really wants?

There are still many developers in Johor who simply build at their whims, without exploring the local market to survey what exactly is the kind of product/houses we local wants. This is what I called marketing. Marketing is not what most people say, sell, sell, sell. Marketing is about understanding what the market wants, and customize the product for them, then sell the product to the market which already existed.

SP Setia is one of the more successful developer in Johor which has capitalised on the marketing strategy even at the initial stage of choosing a strategic location, house type, infrastructure and style of living for their project. They understand the local, so, they succeeded.

So, for the rest of you, when do you want to start knowing your customer before you sell your product to them?

Footnotes:
[1] Figures obtained from the SJER Comprehensive Development Plan
[2] Figures obtained from Dato' Mani Usilappan's talk during the MIEA 2007 Annual Convention.