Prices of new houses to drop by 10%, says Guan Eng

Finance Minister Lim Guan Eng says the government will re-impose SST for building materials if developers are reluctant to reduce prices of homes.

KUALA LUMPUR: Prices for new housing projects are expected to drop by 10% following the government’s move to exempt the sales and services tax (SST) on building materials, said Finance Minister Lim Guan Eng.

He said the Real Estate and Housing Developers’ Association Malaysia (Rehda) had approved the price reduction.

“SST exemption has been given for building materials to give a boost to the real estate sector and we hope it can bring about a decline in house prices,” he said at the Parliament lobby today.

Lim, however, explained that the drop in house prices did not involve price-controlled housing projects such as low-cost and low medium-cost houses.

As for the price of existing housing projects, he asked the people to wait for the announcement during the presentation of the 2019 Budget this Friday.

Asked what would happen if the developers were still reluctant to reduce prices, Lim said the government would re-impose the SST for construction materials.

“Action will be taken if they are reluctant. But I believe Rehda will explain to its members and they will comply, otherwise we will talk about market demand and supply and they will be penalised by the buyer.

“For me, I want a 10% reduction and I hope Rehda can work in that direction to make sure it is achieved and I’ll give them time,” he said.