Mah Sing expects stronger property buying momentum in 2H


KUALA LUMPUR: Mah Sing Group Bhd expects stronger buying momentum in the second half of the year, with potential buyers expected to buy ahead of the goods and services tax (GST) implementation next year.

Executive director of corporate and investment Datuk Steven Ng (pix) said there may be a rush to buy property, especially towards end-2014, due to inflationary fears and many see property as an inflation hedge.

He said house prices in Malaysia grew some 3% from 2001 to 2009, and subsequently 6.7% in 2010, 9.9% in 2011, 11.8% in 2012 and 11.6% in 2013. In the first quarter this year, there was an 8% growth.

"Generally, after the first half this year, people are realising that house prices are not going to correct. There will be a momentum or a push factor which is on the GST and inflationary issues," he told a press conference at the Invest Malaysia 2014 here yesterday.

Moving forward, he said houses in Malaysia are expected to see a 5% to 9% single digit price growth due to the mass market and its high base.

He said those willing to buy ahead of GST implementation will purchase but after GST, there are still demand for houses.

"It's a fact that GST will come in, but pre- or post-(GST), we will still see demand. But perhaps there will be more people rushing into it pre-GST and post-GST, there are people still eyeing property," said Ng.

Meanwhile, he said material cost is moving (increasing) gradually depending on the subsidy cuts and electricity tariff increase. In view of the GST, most developers would price in the cost of 4% for residential projects and 6% for commercial projects.

Mah Sing currently has a range of residential, commercial and industrial projects spread across Greater KL and Klang Valley, Johor and Iskandar Malaysia, Penang and Sabah, with a remaining gross development value and unbilled sales of RM33.9 billion.

Its Klang Valley projects are expected to contribute 60% to sales this year, followed by Johor Baru/Iskandar Malaysia projects at 23%, Penang projects 10% and Kota Kinabalu, Sabah projects at 7%.

The property developer has a RM3.6 billion sales target for 2014 and achieved property sales target of RM770 million as at March 31, 2014. It has locked in an unbilled sales of RM4.64 billion as at March 31, 2014. --
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