'Rise in house prices after GST temporary'

Publish date: Sun, 16 Nov 2014, 11:48 PM

ALOR GAJAH: Any increase in house prices upon implementation of the Goods and Services Tax (GST) in April next year is just temporary, as a number of measures are already in place to curtail the rise.

Deputy Finance Minister Datuk Ahmad Maslan said among the measures were increasing the real property gains tax to 30 per cent from 15 per cent, enhancing house prices to RM1 million from RM500,000 for foreigners, and barring developers from undertaking projects based on the Developer Interest-Bearing Scheme.

He told the media this after officiating at the closing of a GST information session and a briefing on current issues at the Masjid Tanah parliamentary constituency, here, yesterday.

Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan said recently that houses prices could increase by three per cent after the GST implementation, based on a study by the Real Estate Housing Developers Association of Malaysia.

Ahmad, however, said the figure could be just one to two per cent based on the calculation of the Finance Ministry and the Customs Department.

Meanwhile, he said he would propose to the government to reduce the RON 95 petrol price if global oil prices fell to between US$70 and US$75 (RM231 and RM250) a barrel.

He said a reduction could be undertaken as it would have passed the subsidy threshold of the government.

The price of Brent crude oil is currently at US$79.41 a barrel. Bernama

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calvintaneng

Rise in House Prices after GST Temporary?

Calvin Tan Research think otherwise for these reasons

1) Gst is 6% for all construction related material. Developers will definitely raise house prices by at least 6%.

2) The Media says only 3%. Who will bear the cost of the other 3%? Will the Developers absorb the other 3% price rise? Of course not. See reason number 3

3) With the increase of Ron95 petrol & Diesel by 10% transport charges are also up by the same margin of 10%. So expect up to 16% price rise - 6% Gst & 10% petrol rise. Profit margins are now being squeezed left and right. Developers might resort to cutting costs & also cutting corners. Example is using cheaper cement bricks instead of red bricks, and more inferior China steel than local ones for new houses.

4) The experience in Singapore - when Singapore Govt increased Gst by 7% real estate prices rose in tandem by a corresponding 7%.

Conclusion.

Expect Real Estate Prices in Malaysia to rise by at least 6% or more after Gst. The only solution to avoid price rise not only in real estate, but in all levels of society is to postpone or call off Gst.

The only way to protect from impending Gst price rise of between 6% to 16% is to buy before Gst is implemented. It is better to sell Stocks & Shares & put into Real Estate to protect from Further Rising Real Estate Prices in Malaysia now.

By Calvin Tan Research, Singapore

2014-11-17 12:55

marc11

This is for subsales or new launch?

2014-11-17 18:05

Sean

personally think, calvin is correct... both market subsales & new launch will be impacted as well... :P

2014-11-17 19:57

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