No GST Doesn’t Mean Cheaper Houses Soon
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The National House Buyers Association (HBA) has cautioned prospective house buyers against expecting an immediate reduction in property prices with the elimination of the goods and services tax (GST) on June 1.
HBA secretary-general Chang Kim Loong said the government's decision to zero-rate GST pending the re-introduction of the sales and services tax had placed developers in a dilemma over the pricing of properties already built or under construction.
He pointed out that they had paid GST on materials, professional fees and other costs.
"If they bring their prices down by 6%, they will be lowering their profit margins" he said, adding that he doubted they would be willing to do so.
It might therefore take some time for the property market to recover, he told FMT.
Chartered property surveyor Ernest Cheong said it would take about two years for the market to recover, adding that it would mainly benefit those looking for properties priced at RM300,000 and below.
"Forget the high-end houses because most Malaysians can't afford them" he said.
Speaking to FMT, he said he would urge developers to "forget dreamingâ€ about making big profits.
He said increased savings with the abolition of GST and highway tolls would not immediately drive people towards buying houses.
"They would likely want to take care of other priorities first" he said. "Their objectives will be to settle their debts and focus on daily needs. They will look at investing in property after they start to see their savings grow.â€
Cheong also said he believed a typical Malaysian family would be able to save RM400 a month with the abolition of GST and tolls.