Expected property price reduction to boost sector, say experts
KUALA LUMPUR: The expected price reduction of between six and 10 per cent for houses in the RM300,000 and above range is set to be a positive catalyst for the property sector after the past 10 bad years, said experts.
Malaysia Institute of Estate Agents past president Siva Shanker said the property market had improved by four per cent in the first quarter of this year, as buying sentiment continued to improve.
“I am sure that this is doable, as it is proposed by Rehda (Real Estate and Housing Developers’ Association), an association made of reputable property developers with a lot of experience in the market.
“And 10 per cent is a lot of money, especially to the B40 and M40 groups, to a certain extent. This is the kind of catalyst we need after the past 10 bad years.
“I am sure that the feel good factor, after the 14th General Election in May, will continue until year-end — and the property market may end the year in the positive territory,” he said yesterday.
On Tuesday, Penang Rehda chairman Datuk Toh Chin Leong announced that prices of properties costing RM300,000 and above in the state would be reduced by 10 per cent, in line with the Sales and Services Tax (SST) exemption on building materials.
He said affordable houses costing below RM300,000 would see a six per cent price reduction for existing and new projects.
Siva said the proposal mooted by Rehda Penang could bring trickle-down effect to other developers as they would try to remain competitive in the market.
However, an industry source said it was uncertain if house prices could go down by six to 10 per cent following the implementation of SST.
Rehda was quoted as saying in 2014 that the move from SST to Goods and Services Tax (GST) would only result in about 2.6 per cent increase in prices.
“Now that we move back from GST to SST, how is it possible for prices to go down not by the same 2.6 per cent but by six to 10 per cent?” said a source.