House prices seen 3% higher after GST - property consultant

KUALA LUMPUR (Jan 29): House prices in Malaysia are expected to rise about 3% after the goods and services tax (GST) is implemented starting this April.

Property consulting firm Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said although transactions on residential properties were GST exempted, building materials would be taxed under the GST.

"In my opinion, there will be slight increase in residential housing price, but not higher than 3%.

"There will be a wait and see attitude by house buyers, but I think eventually, the market will absorb it,” Abdul Rahim said today, at a press conference on the Malaysian property market outlook.

Abdul Rahim said the property market was expected to be stable, with signs of a slowdown.
But steady growth is still seen this year, according to him.

He was, however, mindful of a larger supply of office space. According to his estimates, there will be an additional 10 million square feet of office space in the Klang Valley, within the next three to five years.

A larger supply of office space is expected to fuel greater competition and rental pressure, according to Abdul Rahim.

As of the first half of 2014, Rahim & Co's estimates showed there were 84 million square feet of office space in Kuala Lumpur.

The occupancy rate stood at 80.1%, according to the firm.

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