Home prices to increase 6.2% with GST

Property prices will likely increase by 6.2 percent once the goods and services tax (GST) is implemented on 1 April as certain building materials are taxed under the regime, said the Real Estate and Housing Developers’ Association Malaysia (Rehda).

“94 percent of the survey’s respondents are very worried over the GST’s impact on overall business costs,” said Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor at the launch of its’ property industry survey results for 2H 2014, noting that GST is one of the key issues presently faced by the property sector.

Other equally important issues are financing for buyers and challenges involving the utility service providers as well as local authorities.

To illustrate how serious things are, Iskandar revealed that launches of commercial and residential properties for 2H 2014 fell 81.6 percent and 62.9 percent respectively from 1H 2014.

“Most distressing are first-time buyers wanting but (being) unable to purchase affordable housing.”

In fact, loan rejections over sales climbed seven percent from 2013 to 2014, said Iskandar.

Meanwhile, issues with utility service providers are on ensuring proper access to water, sewage and electricity for their new projects, he said.

Moreover, high development charges, inconsistent policies/guidelines, slow approval processes by local authorities such as town councils only compound matters.

“The government on a state and federal level ought to engage the private sector in addressing these issues effectively, in particular to increase the purchasing power of Malaysians,” urged Iskandar.