News & Articles Demand, not GST, inflating house prices
Demand, not GST, inflating house prices
28 Mar 2015
"The government yesterday stressed that there are other factors when determining residential property prices, although the upcoming goods and services tax (GST) may cause an increase of between 1% and 2%.
A study has shown that the cost of building materials, location and land acquisition, as well as supply and demand,are the main driving forces in determining price, said Deputy Finance Minister Datuk Chua Tee Yong.
Speaking at a media briefing here, he said the prices of residential properties in most cities have been increasing by 6% annually, and in certain areas, at around 10-20%.
“Actually, developers will not raise prices unless there is an increase in demand.
“At present, new property launches have experienced a slowdown, due to tighter lending conditions.
“This indicates that the GST is part of the cost, but not the main issue in determining the prices of residential properties,” Chua said."
A study has shown that the cost of building materials, location and land acquisition, as well as supply and demand,are the main driving forces in determining price, said Deputy Finance Minister Datuk Chua Tee Yong.
Speaking at a media briefing here, he said the prices of residential properties in most cities have been increasing by 6% annually, and in certain areas, at around 10-20%.
“Actually, developers will not raise prices unless there is an increase in demand.
“At present, new property launches have experienced a slowdown, due to tighter lending conditions.
“This indicates that the GST is part of the cost, but not the main issue in determining the prices of residential properties,” Chua said."
Source: The Rakyat Post