The upcoming introduction of the goods and services tax (GST) would positively impact the residential property sector as investors would likely invest in residential segment this year rather than next year. Talhar & Wong Sdn Bhd managing director Foo Gee Jen said this is because many perceive that the price of houses could be higher in 2015 when the GST is introduced. ”The perception now is that residential developers are going to transfer the additional costs to the buyers once GST is implemented. So people would think that they are going to pay more. ”This would result in the buyers deciding to purchase houses this year instead of next year,” he told a media briefing on property market ,here, yesterday.
This, Foo said, would push the demand for residential property as well as its prices. The GST will be implemented in Malaysia by April 2015.
Meanwhile, the residential demand, particularly affordable housing, will remain highly fuelled by a rapidly growing population of adults between the ages of 25 and 54 and expanding middle-income groups. Foo said the mid-segment rental market will remain upbeat on the back of a healthy growth in housing demand.
He believes that the overall residential market would remain healthy although the high level of household debt is likely to weigh down on buyers’ purchasing ability. In 2013, the housing market was upbeat with an estimated total of 12,808 new units of terraced, semi-detached and detached houses launched. The new supply for 2014 is estimated to fall to some 9,800 units in total namely 1,000 detached, 1,800 semi-detached and 70,00 terraced units, Foo said.
He said this year, developers will face the threat of rising construction cost fuelled by higher oil prices and rising material costs. The cost hike has led developers to build units of smaller floor areas, he said, adding that smaller units are increasingly more popular since they are affordable to a larger segment of prospective buyers.
