JOHOR-BASED KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng says it is 'too early' to gauge the impact of yuan devaluation on the Johor property market.

'The top range of well-heeled Chinese buyers tend to buy in the United States, Hong Kong and countries with more stable currencies. Malaysia and other South-East Asian destinations will attract the less wealthy of the lot.'

Tan says the drop in the number of Chinese buyers will be balanced out by the entry of Singaporeans or Malaysians working in Singapore because the Singapore currency has strengthened against the ringgit.

If the ringgit is cheaper, Johor properties will be attractive for these lower range Chinese buyers, he says.

In the case of people earning in Singapore dollars, Johor properties are even cheaper and people may go for a landed unit, instead of a high-rise, because that seems a better proposition.

'People buy properties based on hope and future. Foreign exchange gain is another factor,' Tan says.

Hong Kong-based Credit Suisse property analyst Du JinSong says the Chinese have been buying abroad the last several years and if the yuan devaluation is just 'the beginning', many will just buy overseas.

'The Chinese may buy in Hong Kong, the United States or in countries whose currencies are strengthening,' he says.

Another Johor-based consultant Landserve (Johor) Sdn Bhd executive director Wee Soon Chit says those with Singapore pay cheques have a higher probability of buying a Johor property compared with a Chinese but it is still early days.

The drop in the number of Chinese tourists have also affected the Johor market. For the first quarter of 2015, the number of Chinese tourists fell 27% to 379,265 compared with 520,466 last year. Travel agents attributed this drop to the loss of planes last year. Apparently, some developers were 'subsidising' tour packages. The catch is that the coach loads of Chinese tourists must stop at their show galleries. 'Some of these tour packages included Danga Bay as one of the stops,' an observer says.

Over the years, the middle class boom in China have driven many to diversify into various asset classes from stocks to overseas real estate.

The middle-income group like Malaysia, Japan and Portugal 'will be most affected by the yuan devaluation as overseas properties are getting more costly for them,' Knight Frank head of valuation and consultancy Thomas Lam tells South China Morning Post.

Much of the vim and vigour surrounding Iskandar Malaysia in Johor came about after mainland Chinese developers descended on the state in 2010.

Launched in 2006, the economic region had a slow start. Several Middle Eastern parties came but the fall of Dubai's property sector in 2009/2010 reversed the flow.

The vacuum was filled by the Chinese property developers. But their strategy of launching units by the thousands does not seem to be working.

Among the first to arrive on Malaysian shores was Country Garden Holding Co Ltd who launched about 9,000 units at one go in 2013.

The devaluation of the yuan is expected to speed up outbound real estate investment.

As for Johor, the state does not need more condominiums. National Property Information Centre data show that as at the end of 2014, Johor had 719,421 existing residential units, 142,567 units incoming supply and 193,271 units being planned in a population of 3.4 million.

In the first quarter of this year, local authorities froze approvals for new projects. Johor simply needs to take stock, likewise the China developers who are building there.