Market watchers expect Malaysia’s property market, particularly the commercial sub-sector, to benefit from the removal of the Goods and Services Tax (GST), reported The Sun Daily.
“Now is a good time to spur demand, a good time to buy and a good time for developers to market their products. Property developers could lower prices or promote packages to push sales during this period,” said Dr Yeah Kim Leng, economics professor at Sunway University Business School.
With GST zero-rated, both supply and demand for commercial properties are expected to expand as there would be greater incentive to invest, noted Malaysian Institute of Estate Agents past president Siva Shanker.
The overall property market is expected to perform better in the second half of 2018, as the “feel good” factor from the general election drives private consumption.
“That euphoria will translate into sales immediately for the retail sector; private consumption will rise. When people feel good, they spend … the feel good factor will continue as this government continues to do the right things, which I think they are. Malaysians will see changes that they never expected to see in their whole life and this will make them spend even more,” explained Siva.
Compared with 2017, this year’s property market will be positive in terms of value and volume, albeit at a small growth of between two and four percent, before posting “fantastic growth” in 2019 and 2020.
“For 2018, perception and euphoria will drive the market and domestic economy. I think the property market will turn the U-curve this year and I reiterate my opinion that 2021 will be the next property high,” he added.
Meanwhile, Yeah believes GST – a broader and more efficient tax system – would make a comeback in the future when Malaysia is more ready.
“I would not rule out the return of GST. If we can raise the income levels of B40 and M40, GST could make a comeback next time when we are more ready … GST is stable and flexible. It can be adjusted to suit the economic situation. For example if the economy is doing well, the GST rate can be raised. SST also can be adjusted but the tax base is not so broad,” he said.
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