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.
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.
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 Ku Swee Yong.
“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.
“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”.
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.”
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.” ADDITIONAL REPORTING BY CHEN LIN AND JUSTIN ONG