Johor’s economy thriving - so why is cost of living a likely hot-button issue for state election?

JOHOR BAHRU: When purchasing officer Ahmad Azri Azizi was ready to get married and start a family, he had wanted to buy a two-storey townhouse near Johor Bahru city centre.

The homes he had in mind were part of Johor's affordable housing scheme, Rumah Mampu Milik Johor (RMMJ), where some townhouse units are priced at around RM180,000 (US$44,440).

But after years of unsuccessful applications, the 32-year-old gave up.

"People say anything below RM300,000 is rare now," said Ahmad Azri. "It's really challenging to get the kind of house you want at a price you can afford."

Instead, he and his wife, a civil servant, bought a compact double-storey house in Kota Masai, Pasir Gudang, for RM290,000   on the resale market  this year.

Their home, which has a built-up area of 600 square feet, is about an hour's drive from Johor Bahru during peak periods. The larger home he once envisioned, closer to where he works, remains out of reach.

"Financially, we just can't afford it,” he said.

Ahmad Azri Azizi has found it challenging to find a house he wants at a price he can afford. (Photo: CNA/Zamzahuri Abas)

Ahmad Azri's experience reflects a growing concern among many Johoreans: While the state is one of Malaysia's biggest economic success stories, life is not necessarily more affordable.

Johor recorded the highest gross domestic product (GDP) growth among all Malaysian states in 2024 – at 6.4 per cent, it was higher than the national average of 5.1 per cent. In 2025, it attracted a record RM110 billion in approved investments, surpassing even Selangor and Kuala Lumpur.

Yet for many residents, wages have struggled to keep pace with rising home prices, rents and living costs.

The result is a paradox at the heart of Johor's rapid transformation: The state has never been wealthier, but many of its residents feel increasingly priced out.

Affordability and the distribution of economic gains are set to be one of voters' concerns in the run-up to Johor’s state election on Jul 11.

Analysts expect a fiercely fought contest, with a likely three-way fight for all 56 seats in the state assembly among the governing Barisan Nasional, Perikatan Nasional and Pakatan Harapan pacts - and that’s not counting some smaller parties planning to throw their hat into the ring.

“These issues affect a broad coalition of voters … when residents are pushed to the fringes of towns, they carry that grievance to the ballot box,” Johor urban planning expert and property consultant Samuel Tan told CNA.

THE "SINGAPORE FACTOR"

Johor's proximity to Singapore has long made it a magnet for investment. But the dynamic is intensifying.

The Johor-Singapore Special Economic Zone (JS-SEZ) is expected to attract more businesses from across the Causeway , while the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link will significantly improve cross-border connectivity, bringing more workers, tourists, investors and retirees into the state.

Analyst Nasser Ismail, a former senior official with the Iskandar Regional Development Authority, said these developments are creating what he called a "dual-market dynamic", where prices in parts of Johor increasingly reflect Singapore's purchasing power rather than local earning capacity.

"What happens is that the local economy starts pricing itself against a different benchmark," added Nasser, who is also founder of the JS-SEZ Monitor Substack.

Based on 2024/2025 Department of Statistics Malaysia (DOSM) data, Johor’s median household income was around RM7,712 (US$1,896) per month, a 12.1 per cent increase from about RM6,879 per month in 2022, State Investment, Trade, Consumer Affairs and Human Resources Committee chairman Lee Ting Han said in May.

Singapore’s  median monthly household income was S$12,446 (US$9,250) last year , according to Singapore Department of Statistics data released in February.

An aerial view of Johor Bahru town on Jun 15, 2026. (Photo: CNA/Zamzahuri Abas)

Nasser likened the phenomenon to other prosperous border regions including Hong Kong and Shenzhen, as well as Basel in Switzerland and neighbouring German towns, where income differentials spill over into housing and consumer markets.

Nowhere is this more evident than housing.

While Malaysia does not publish official state-level housing affordability rankings, property portal New Projek estimates Johor's median housing price to median annual income ratio, known as the median multiple, at 7.4.

This places it among the highest in the country and firmly in the "severely unaffordable" category, based on a method recommended by the World Bank and United Nations to gauge housing affordability .

Property consultant Tan believes the situation may be worse than the headline figures suggest.

This is because state-level income data includes Johoreans who  reside in Malaysia but  earn salaries in Singapore dollars , masking the affordability challenges faced by workers paid entirely in ringgit, he argued.

Using the median annual income figures fo…