Why your retirement plan is good news for Iskandar Malaysia

By Ryan Khoo / Alpha Marketing, The Edge Property | December 22, 2015 10:00 AM SGT
One major trend that is highly positive for Iskandar Malaysia is Singapore’s ageing population. According to Singapore’s Department of Statistics, there will be 900,000 residents aged at least 65 by 2030 in the city-state.
This effectively creates two outcomes. The first is that Singapore, with its low birth rates and an ageing society, has to continue its policy of population growth via immigration. The old age support ratio (OASR) was 6:1 in 2014, which means there were six working adults to support each retiree in the country. By 2030, the ratio could fall to 2:1, which would be disastrous for economic productivity. A clear example of that today is Japan, where the economy has stagnated for more than two decades.
To avoid a similar fate, Singapore would have to continue pursuing population growth via immigration — thereby increasing population density on the island owing to limited land — as per the much-maligned 2013 Population White Paper, to hit a 6.9 million population by 2030. Singapore is currently the third most-densely-populated country in the world, according to a recent government statistic. Hence, the cost of space here will remain high and climb higher in the longer run, making the business case for Iskandar Malaysia stronger.
The second outcome is how Iskandar Malaysia has become an option for retirement planning for Singapore’s elderly. The median age for Singapore today is 40 years, and observations on the ground show that much of the real demand for properties in Iskandar Malaysia has been by the country’s older population. Many in this segment are sitting on cash savings of $100,000 to $200,000, yet are notable to buy a second or third property because of lower loan amounts owing to the total debt servicing ratio and additional buyer’s stamp duty for additional properties. So, buying a property in Iskandar Malaysia becomes a viable option because of the affordable pricing and the proximity to Singapore.
Property in Iskandar Malaysia can serve as a potential retirement home and an investment. Other overseas property investments will not be able to achieve both these objectives. Those who buy properties in faraway locations such as Australia or the UK cannot possibly expect to retire there unless they emigrate, thus weakening links to Singapore, and only if they can afford the higher cost of living in these countries. Iskandar remains the only practical retirement option as they can enjoy Malaysia’s lower cost...