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Residential property prices to rise 3% to 4% after GST

KUALA LUMPUR: Residential properties are exempt rated but the net impact from the implementation of the goods and services tax (GST) will cause their prices to rise 3% to 4% after the consumption tax comes into play next April, said Mah Sing Group Bhd executive director Datuk Steven Ng Poh Seng.

The estimation came after the group had a dialogue with its contractors, he told pressmen after the groundbreaking ceremony of the Southville City Direct Interchange project yesterday.

As for commercial properties, buyers will be charged the full 6% GST as they are “standard-rated” items, he said.

On the group’s remaining gross development value (GDV), Poh Seng said it — plus unbilled sales — stands at RM66 billion, and the group has 3,720 acres (1,505ha) of undeveloped tracts.

PohSeng_theedgemarketsHe said the RM66 billion includes a recent 105ha Puchong land buy for RM656.9 million or RM170 per sq ft from Huges Development Sdn Bhd by the group’s subsidiary, Mah Sing Group Ventures Sdn Bhd. The land is in Puchong’s central business district and carries a GDV of RM9.3 billion.

Next year, Poh Seng said, 84% of the group’s launches will be priced below RM1 million compared with 87% currently.

“In the next two to three years, we will still be focusing on the masses because there are still many people who do not own a home.”

Echoing Poh Seng’s thoughts, Mah Sing chief executive officer Ng Chai Yong said most of the group’s products range between RM400,000 and RM600,000 per unit, as it aims to encourage home ownership, particularly among first-time buyers.

Chai Yong noted that the Southville City @ KL South  project is still in its infancy, as the group has launched only RM1.5 billion or 18.07% of its RM8.3 billion GDV. With a mixture of residential and commercial properties, the Bangi project will be developed in seven phases, which will sustain the group until 2020, he added.

Also present to witness the event was Works Minister Datuk Seri Fadillah Yusof, who said as of September, the private sector has rolled out developments worth RM69 billion or 82% of the total ongoing projects in the country. The government, meanwhile, holds the remaining 18% or RM12 billion.

On the controversial Kinrara-Damansara Expressway (Kidex) project, Fadillah said a valuation report on the project is pending from the Petaling Jaya City Council (MBPJ) before it can proceed.

“It is now up to MBPJ and the Selangor government on whether the project should proceed. We will wait for MBPJ on its full report [on Kidex] before finalising the project,” he said, but did not give a time frame.

He also noted that Kidex Sdn Bhd, the project developer, has done an environmental impact assessment, a traffic impact analysis and a social impact study on the proposed 14.9km fully-elevated highway.

 

This article first appeared in The Edge Financial Daily, on November 13, 2014.

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