29 October, KUALA LUMPUR – The Real Estate and Housing Developers’ Association Malaysia (Rehda) says it expects some savings in development cost following the government’s move to exempt basic construction materials and construction services from the Sales and Services Tax (SST) in the effort to reduce house prices.
“We are expecting between 2.5-5.0 per cent savings depending on the type of development, but this will be applicable to new projects only as prices for those projects during the Goods and Services Tax (GST) era would have been agreed upon by the contractor and are in various stages of completion,” said President Datuk Ir Soam Heng Choon in a statement today.
He said together with other discounts and rebates that most developers are currently offering in view of the soft market for new launches, house buyers could look forward to at least five per cent lower prices depending on location and type of product.
It also recommended that the government open up more of its reserve land for development with all land sales to be conducted via open tender, while emulating best practices regarding a lower threshold for en bloc sales and encouraging redevelopment of old buildings and assets for affordable housing.
“Interest rates for home loans should be revised too. We recommend a reduction of 0.5-1.0 per cent off interest rates for first-time homeowners within a specific price range, and reduction of upfront costs which include legal fees and stamp duties,” it said.
Meanwhile, it urged organisations and public-listed companies to introduce profit-sharing schemes and provide incentives namely housing loans and disbursements for down payment to help employees buy a home.
It also recommended that the houses be constructed as semi-built homes, which could allow flexibility in customising spatial usage and layout as well as contribute to lower construction costs and savings.