House prices for new housing projects are expected to drop by 10 percent following the government's move to exempt the sales and service tax on building materials, says Finance Minister Lim Guan Eng.
According to Lim, 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.
“We hope and await to see the new home prices as announced by Rehda.
"Thanks for responding to the SST exemption for building materials even at the last moment because of the deadline at the end of this month, at least can go down by 10 percent,” he told reporters 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 Budget 2019 this Friday.
Asked if the developers were still reluctant to lower home prices as expected, Lim said the government would reimpose 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 percent reduction and I hope Rehda can work in that direction to make sure it is achieved and I'll give them time,” he said.