Iskandar Malaysia in Johor is likely to recover from the economic slowdown much faster than other parts of the country.
Despite the downturn, foundation infrastructure work has begun, and there is clear political will to make the economic corridor a success, a senior valuer said.
Chartered valuation surveyor Samuel Tan said Iskandar Malaysia's proximity to Singapore and the multi-million-ringgit allocation from the federal government are also factors which will help Johor pick itself up better than others.
"A lot of overseas interest was generated when Iskandar Malaysia was launched in 2006. Johor Baru, which had been in a property slump for the past decade, is now seen as a place with good investment potential.
"Malaysians are sceptical (of Iskandar Malaysia's success) because of how the past years went, but I would remind them that it's a 25-year plan. Things will not change overnight," he said.
Tan, who is also executive director of KGV-Lambert Smith Hampton in Johor Baru, added that a statutory body like the Iskandar Regional Development Authority (Irda) also helps to convince foreign investors of the groundwork which the government has set up.
And while much still needs to be done on projects such as EduCity and the Newcastle University of Medicine Malaysia, important foundation work has begun.
"I can give examples of the Eastern Dispersal Link, Jalan Yahya Awal interchange, Southern Link and Senai-Desaru Expressway - all these facilitate traffic flow. "I believe that by the time these roads are ready, Johor Baru will have recovered from the slump and be ready to move forward."
Tan was cautious when asked to comment on reports of soaring property prices, following the Iskandar Malaysia development.
"It's true that following extensive promotion, Iskandar Malaysia captured a lot of foreign interest and things started looking up.
"Unfortunately, the present slowdown set in soon after that. So recovery has been derailed a bit."
House prices in Johor fell nearly 25 per cent following the 1997-98 economic crisis.
A two-storey house in Perling, Johor Baru, which sold for RM280,000 in 1997 will fetch about RM180,000 today.
Tan said although this trend was likely to continue next year, there could be some light at the end of the tunnel next year.
"For instance, about four years ago, a company bought 12ha of commercial land at RM30psf for a large department store in Johor Baru. More recently, they bought another plot of land but this time at RM65psf.
"Even in these uncertain times this company was willing to pay twice the price for this new piece of land. This is a sign that we're slowly moving towards better times, most probably in 2011 or 2012."
The next two years, Tan said, will be a time for Iskandar Malaysia to build up its foundation and strengthen ties with new and prospective investors.
He suggested that Iskandar Malaysia stop depending on foreign investments for the next couple of years.
"I've heard local investors claim that they're not given a level playing field. For the next two years, make it easier for local investors to set up in Iskandar Malaysia. Why not offer incentives for local companies to come in.
"The reason I'm suggesting this is because foreign investors first need to get their own house in order before they can invest overseas whereas Iskandar Malaysia cannot wait, it has to continue.
"And in the meantime, where else do we get investors from, but from our own shores," he said.
Despite the uncertainties surrounding the current business climate, Tan was hopeful about the property market in Johor.
"We're at the stage of building a foundation for Iskandar Malaysia, which is made easier with the close collaboration of the federal and state governments and the private sector.
"With that in mind, we can work towards recovery, which I believe we can expect to see in 2012," he said.
By Business Times (by Anis Ibrahim)
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