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Tackle Other Problems To Reduce Home Prices Besides SST Exemption, Urged Developers

Property developers said home prices in Malaysia can be brought down if Putrajaya helps solve the labour shortage in the construction sector, as well as cut the hefty compliance and development costs borne by home builders, reported The Edge.

Yes, home prices can be reduced, and we want to work with the authorities to bring down prices. However, the aforementioned problems must also be addressed, according to Country Heights Holdings Executive Chairman Tan Sri Lee Kim Yew.

He said this in response to the federal government’s call to property developers to slash home prices, after buildings services and construction materials have been exempted from the Sales and Service Tax (SST).

Lee also noted that other real estate players need to help in reducing home prices, such as building contractors.

“Contractors must cooperate with us also. If they don’t want to cooperate, we cannot bring down the prices. And we also need to listen to them as they could be facing some challenges, like shortage of workers,” he said during the Housing and Property Development Colloquium in Seri Kembangan on Tuesday (2 Oct).

Another speaker during the event was Trinity Group Founder & Managing Director Datuk Neoh Soo Keat, who estimated that developers’ savings from the SST exemption is merely three percent instead of six percent as many professional services are taxable under SST and given the rising labour costs.

He claimed the best way of addressing home affordability is not to reduce home prices, but for the government to come up with ways to increase the income of Malaysians, as well as control rising land costs.

In addition, Neoh is urging the government to allow property developers to increase the density of residential projects so they can build more homes.

“The public is asking the government to reduce the density (of residential projects), while asking for lower house prices. This is a contradictory policy which we would like to urge the government to look into.”

Meanwhile, Savills Malaysia Group Executive Chairman Datuk Christopher Boyd wants the government to boost the supply of low-costing housing to reduce prices.

“There are so many ways to skin a cat. How about this idea – the government identifies major areas of oversupply and approaches the owners or developers and trade those unsold units for vacant state-owned lands.”

“The government will then possess a whole bunch of unsold units priced at RM750,000 each and they can sell a 50 percent share in each of these properties to people whose budget is about RM300,000 to RM350,000. When it’s (time) to resell, the government (can) recoup its investment and the owner takes the other 50 percent,” he suggested.

As for property developers that received vacant land from the authorities, they can build more affordable housing on such sites.

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