Property Hunter Magazine Issue 64 2015 | Seite 126

Prices

DOWN

GST:

J

ust two weeks ago, a
colleague had lunch
with me and asked
what would happen
with GST in April. She
has a condo which she
may want to sell and all her friends
said that sell only after GST so that
she can get a higher price. Then,
she also said that she is thinking of
buying another property but not
sure if she should buy now or wait
because everyone said market is
bad. Yet, after GST what if prices go
up? Let me tell you what I told her
at the end.
Few days ago, I read something
online. For now, let’s listen to
all the three different opinions
from the Customs Department
director of GST, Datuk
SubromaniamTholasy, Real
Estate and Housing Developers
Association (REHDA) chairman
Datuk Ng SeingLiong as well as IFCA
MSC Bhd’s chief financial officer
Daniel Chow.

No bonus for guessing it right
based on the designations.
Yes, Subromaniam said that prices
should be coming down because
the prices of inputs have been
decreasing especially with the
falling oil prices. Therefore, the
developers should pass the savings
to home buyers. In fact, there’s
no tax on residential land, thus
there is no justification for any
increase. Of course he also said
that if everything was the same as
previously, the actual increase with
GST would be between 0.5% and
2% at maximum. However, as he
has said, with the falling costs, this
is no longer the case and the prices
should fall even with GST.
Ng said that any extra costs would
not be absorbed by developers
but would be passed on to buyers.
Based on REHDA’s own calculation,
this should result in a 2.6%

vs

UP

Prices

increase. He said the main issue
was because of major components
such as cement, concrete, bricks
and sand. These are not zero-rated
and yet it consists of 44% of the
total cost of construction.

Chow said that the prices would
not be increasing because there
would already be an oversupply of
residential properties by the end
of the year. There have been many
buyers who bought properties with
the 5% downpayment two to three
years ago and these are completing
end 2015 and 2016 and the buyers
would have to come up with money
to pay. The holding power is not
likely to be strong. He said with this
huge pressure, property developers
would have to think again whether
they can increase the prices by even
just 1 percent.
I told my colleague that I seriously
do not believe developers would
increase prices with the
current market

condition. In fact 2015 is fast
becoming a year of affordability.
Just look at all the new launches.
Majority are RM500,000 or lower or
even just very slightly higher. Gone
are the days when RM700,000
seemed to be the usual price.
Ok, perhaps the size may be a
bit smaller and the location not
that awesome and the number of
units are pushed up but hey, think
objectively, during good times,
would we have this opportunity?
I also think the huge supply from
the 2011, 2012 and even 2013
years are coming into the market
and there’s going to be a huge
supply. Prices would not crash
though. At worst, the sellers sell at a
slight premium to what they bought
and prices remain almost the same
as the current market. We shall see
what happens yeah. Sorry, everyone
is just guessing. That includes me
too.

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5 YEARS,

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