Property Hunter Magazine Issue 63- February 2015 | Page 44

WEST MALAYSIA PROPERTY NEWS

Consultants Forecast Property
Market Rebound Post GST

A

lthough the Goods and
Services Tax (GST) has
caused uncertainties among
the people, the real estate market
is expected to even out after the
initial rush to close sales, property
agents say.
Developers are also taking advantage
of public expectations that they
would have to pay more for property
after the GST becomes effective, real
estate consultants say.
The implementation of the GST is
expected to increase house prices
by between 3% and 5%. It would
likely further exacerbate the market
sentiments. “So (until April 1),
some buyers are likely to adopt a
‘wait and see’ approach due to the
uncertainties on the impact of the
GST,” says C H Williams Talhar &
Wong Sdn Bhd managing director
Foo Gee Jen.
The overall price increase will be
less in the residential sub-segment,
but more in the commercial subsegment, PA International Property
Consultants head of agency Wendy
Tong says.
Although residential properties
are zero-rated for GST, materials
and services supplied in the
development process will be subject
to GST and these costs are likely to
be passed on to home buyers.

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CIMB Research head of research
Terence Wong said in a report that
this would be a “tricky” year given
the pick-up in sales momentum in
2014 on expectation of property
prices rising post GST. He points
out developers have faced a slow
first half of last year due to Budget
2014 measures to curb speculation,
however, property sales has picked
up in the second half on renewed
confidence and expectations that
property prices would rise.
“The net effect is that 2015 could
end up being a similar year to 2014
in terms of property transactions,
which we could categorise as a
lacklustre year,” Wong said.
Based on the experience of several
countries that implemented GST,
Wong says there has been a pick-up
in retail sales ahead of the valueadded tax, particularly three to six
months before the implementation.
Retail sales then eased (in those
countries) in the six months after
GST before rebounding in the nine
to 12-month period after (see chart).
“If Malaysia goes through the same
pattern and property sales also
mimic retail sales, the second half
of 2015 will be a trying period for
developers,” Wong says. Several
developers have lined up aggressive
launches to take advantage of preGST buying to lock in as much sales
as possible before potential postGST blues set in.

Malaysia’s Property Sector Lowered
To Neutral On GST: CIMB Research

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IMB Equities Research has
downgraded Malaysia’s
property sector from
Overweight to Neutral due to
tougher property market conditions
after the Goods and Services Tax
(GST) is implemented.
The research house said that
developers that found it difficult
in 2014 will have to contend with
another difficult year in 2015.
However, it pointed out that
savvier and stronger developers
such as Mah Sing and Eco World
should be able to weather any
turbulence better than the rest
and therefore “we keep them as
our only Buy calls”.
“SP Setia and UOA Dev are
projecting flattish new sales while
Mah Sing and UEM Sunrise have
yet to announce their official
targets. It would appear that Mah
Sing and Eco World will likely be the
only developers aiming for higher
new sales in 2015,” it added.
Eastern & Oriental is confident
that the group can achieve mor B