THE volume of property transactions in the country for 2018 is expected to increase due to the improvement in spending power arising from the zerorisation of the goods and services tax (GST).
According to a Raine & Horne projection for 2018, the property transactions in the country are expected to register 305,213 units, a drop of 2.1% from 311,824 units in 2017.
The contraction is slightly smaller than the 2.6% dip registered in 2017, which saw property transactions fell to 311,824 units from 320,425 units in 2016.
According to Geh, about 70% or 192,460 units with RM68.4bil of the transactions projected for 2018 comprise residential properties.
For Penang, the forecast property transactions in 2018 is 16,461 units against 16,592 units in 2017, a 1% drop.
In 2017, the contraction was about 12%, which saw the volume of transactions declined to 16,592 from 18,352 units in 2016.
KPMG Head (North) Datuk Ooi Kok Seng tells StarBizWeek that the middle-class earners will increase their purchasing power by 2% to 4% following the zero-rating of goods and services tax (GST) effective June 1 .
Household essentials, lifestyle goods and services, RON97 petrol, and utility bills, are some of the items subject to GST.
According to Ooi, house buyers can also expect a possible reduction in the selling price of new residential properties.
“The cost of construction will go down with the zero-rating of GST for building materials and construction services.
“Although the sales and services tax (SST) will come in, the SST essentially is still a narrow based one tier tax system that covers certain raw materials.