PARAMOUNT MAY CUT PROPERTY PRICES BY 3pc
Developer cites lower construction costs after SST implementation
PROPERTY developer Paramount Corp Bhd expects to lower the prices of its properties by between two and three per cent following the implementation of the Sales and Services Tax (SST) on September 1.
Group chief executive officer and executive director Jeffrey Chew Sun Teong said the reduction was due to lower construction material costs by one to two per cent after the implementation of the SST.
“Construction make up about 50 per cent of project cost, with the rest being land acquisition, consultation and input costs.
“Of these, only 15 per cent of construction cost was tax exempted, which reflects the overall construction cost reduction of up to two per cent.
“With this cost reduction, we can reduce real estate prices, but only up to three per cent,” he said after Paramount’s six-month financial performance and second half outlook briefing, here, yesterday.
Chew said the reduction in residential prices was also closely related to the type of project and its location, as this would relate to whether Paramount would absorb the SST or pass it to buyers.
“We will see the need to either absorb the SST or if the buyers have to bear the tax,” he said.
On prospects for the second half, Chew said Paramount was on track to achieve its RM1 billion annual sales target, driven by new property launched with total estimated gross development value of RM1.2 billion for the rest of the year.
In the first six months, Paramount registered a revenue of RM440.6 million, of which 68 per cent, or RM301.3 million, was contributed by the property portfolio, with the remaining 32 per cent, or RM139.3 million, from the education portfolio.