Penang property sector braces for rush as GST looms

There is strong demand for public housing in Penang, with some 40,000 on a waiting list medium and low-cost housing. – The Malaysian Insider file pic, January 5, 2015.The real estate sector in Penang is bracing for a surge in property purchases in the first quarter of this year, as house buyers rush to beat the implementation of the Goods and Services Tax (GST) on April 1.

Michael Geh, advisor of the Penang Property Summit 2015, said the GST on housing will see a "run-up" in purchases of both new and secondary properties during this period.

"A lot of people who are ready to buy new property will make the purchases during this period rather than after the imposition of the GST," said Geh, who is also vice-president of the International Real Estate Federation (Fiabci) Malaysia.

He said prospective buyers need to take advantage of platforms that offer housing options, such as the summit which is taking place this weekend, to decide and seal purchases during this period.

Geh said the industry may witness a lull for a few months following the GST, as the market observes and examines the implications of the tax on housing.

He said other countries that saw GST being implemented had experienced the trend where the first few months went by with potential purchasers and the industry trying to grasp its impact.

GST will be enforced in Malaysia on a list of goods and services which will be charged 6% tax at every stage of the supply chain.

Geh was speaking at a press conference to announce the summit's Penang International Property Conference 2015, to be held on January 9 and 10 at the sPICE Arena in Penang.

The summit is organised by the Penang government in collaboration with Pen Events Sdn Bhd.

The Edge is an event partner of the summit.

Also present were Jagdeep Singh Deo, the state executive councillor for housing, and town and country planning, and Pen Events CEO Ong Ban Seang.

Jagdeep said a property exhibition will also be held at the venue from January 9 to 11, with a charity auction and donation drive to aid victims of the current flood disaster that has hit other parts of the country.

He added that the Penang Housing Department will be present at the expo to accept registrations for the state's affordable housing units.

The strong demand for public housing in the state has seen a waiting list of some 20,000 applicants for low-cost housing (up to RM42,000 per unit) and another 20,000 for low-medium cost housing (up to RM72,500), he said.

Some 4,000 applicants also registered for the new category of affordable housing (below RM400,000 per unit on the island and below RM 250,000 on the mainland) in the first eight months of last year, he added. – The Malaysian Insider