PETALING JAYA (May 17): Property prices are expected to drop following the goods and services tax (GST) rate reduction to zero from 6% prior, said the Real Estate and Housing Developers’ Association (Rehda) president Datuk Seri FD Iskandar.
“Construction material prices and costs should go down. But we expect big-ticket shopping to be delayed until June [when the new rate takes effect],” he told EdgeProp.my.
* Hillcrest Gardens reduces Hillcrest Heights condo price by 3% immediately
* S P Setia: Proposed zero-rated GST may boost local property market's buyer sentiment
* Maybank Investment: GST zero rate positive but needs more clarity
* Tax consultants: Zero-rated GST could spur market sentiment
* Property consultants expect positive effect from zero-rated GST measure
Moreover, he praised some developers who had already lowered their prices in response to the new GST rate and hoped that more will follow suit.
“GST is about 2% to 4% of our cost… it is good that some have reduced prices. In the long run, the savings should be passed on to consumers. Hopefully, there will then be a higher number of people looking at properties,” he added.
However, he warned of profiteering in the short term and called for effective implementation and enforcement to prevent unscrupulous vendors who maintain higher prices despite the zero per cent GST.
He also said it remains to be seen how the new government will permanently remove the GST, if at all.
“GST is an act of Parliament so they will need to go through Parliament if they wish to repeal it? Give a waiver? We shall see,” he said.