IT was a somewhat sombre 8th Malaysian Property Summit on Wednesday with property consultants and a taxman highlighting how prices will move post-goods and services tax (GST) as a result of an over supply in most sub-segments. There will be more clarity by the middle of the year.

The main take-away was the over supply in high rise residentals, hotel rooms, office and retail space. The shortage is in affordable housing, shop houses, industrial land and landed units.

The event was organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) .

Says organising chairman James Wong: “There is a mismatch of what the market demands and what’s available, with developers not paying attention to affordable housing the last two years as they concentratre on high-end and upper middle housing.”

Jones Lang Wootton senior vice-president David Jarnell says 2015 will be an “extremely challenging year” for developers who will have to be less greedy. “The sector is definitely moving into slower growth,” he says during a panel discussion.

PEPs president Datuk Siders Sittampalam says the impending GST will not have a major impact on pricing.

“The fundamentals of the market will affect pricing. But the GST will affect developers’ cost,” he says.

Obervers say unlike in Thailand, Singapore, Australia and Hong Kong, when the GST – or its equivalent – was introduced, there was a mild property boom in these countries. But this did not happen in Malaysia. Buyers and real estate personnel are waiting to see how prices will move after April.

The general sentiment is that developers may have to absorb the GST and the days of pricing one launch higher than the previous one are over.

Source : The Star, 7th February, 2015