The most serious challenge that property developers will face in 2014 is the mounting cost of projects, according to Guocoland (M) Bhd Managing Director Tan Lee Koon.
“The external market factors and Bank Negara’s stringent lending guidelines aside, the biggest factor will be the current rising cost of development,” he said, adding that the prices of construction materials are also expected to increase again due to the looming electricity tariff hike next January.
Workers may also ask for higher wages due to higher expenses, added Tan. “There are also perennial problems like labour shortage and inconsistent supply of materials that the industry faces from time to time.”
Regarding the new real property gains tax (RPGT), he believes that the property sector will feel its impact in the near term.
Under Budget 2014, the tax for properties sold within three years is 30 percent, those disposed within four to five years is at 20 percent, while those sold after six years are exempt from the RPGT.
Moving forward, Kuala Lumpur and Petaling Jaya will likely remain as property hot spots due to the scarcity of land in these areas, especially in suburban locales like Rawang, Semenyih and Puchong South, he predicted.
“As a matter of fact, we have received quite a number of enquiries about our upcoming launches in Emerald, Rawang and we are optimistic the market will pick up after the year-end holidays.”
“And this explains why we are enthusiastic with our upcoming launches – the integrated Damansara City development in Damansara Heights and Emerald in Rawang,” Tan added.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
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