KUALA LUMPUR: The rise in the sales and service tax (SST) to 8.0 per cent is poised to impact the expenses associated with property acquisition.
Sheldon Fernandez, Country Manager of Malaysia (PropertyGuru.com.my and iProperty.com.my), suggests that this adjustment will prompt buyers to exhibit greater price sensitivity and exercise caution in their purchasing decisions.
Fernandez noted that the prevailing high asking prices in the market have already redirected buyer attention towards the rental sector.
He further observed that the rental market has experienced robust demand throughout 2023, with expectations for continued growth in the foreseeable future.
"As the market evolves, it is crucial for industry players to understand current consumer preferences and trends. This will enable them to customise their property offerings and contribute to the development of more affordable housing for Malaysians," he said.
The PropertyGuru Malaysia Property Market Outlook 2024 showed a quarter-on-quarter decline of 7.4 per cent in the Sale Demand Index in Q4 2023.
This suggests that while the intent to purchase is there, the actual conversion may be impacted by various factors, such as economic uncertainties and rising interest rates, Fernandez said.
"Our study also shows that 60 per cent of respondents agreed that the increase in the service tax rate will affect the cost of property purchases," he said.
As per the Consumer Sentiment Study (CSS) for the first half of 2024, households with low and middle incomes are willing to sacrifice certain amenities, such as yoga decks, jacuzzis, tennis courts, gyms, pools, and designated parking lots, in order to reduce the selling price of residential properties.
This trend indicates a shift in consumer preferences towards a value-oriented mindset, prioritising essential property features while adhering to budgetary constraints.
Homebuyers believe that residences with green features can lead to long-term cost savings on operational expenses.
Fernandez noted a sustained high demand for affordable housing, particularly among low-income individuals and young families.
The Consumer Sentiment Study (CSS) for H1 2024 revealed that 30 per cent of respondents are considering purchasing a property within the next two years, with 60 per cent of this group eyeing homes valued at RM400,000 or lower.
In addition to financial considerations, potential homebuyers expressed concerns about project delays (65 per cent) and low construction quality (64 per cent) when evaluating newly launched properties.
Fernandez emphasised the significance of effective project management and quality control, stressing the need for developers to address these issues to attract potential buyers.
According to the Ministry of Housing and Local Government (KPKT), 481 sick projects and 112 abandoned projects have been identified across the country as of June 2023.
"Therefore, it was not surprising to see that 66 per cent of respondents are calling for better enforcement by the authorities to ensure the highest compliance during the defect liability period (DLP).
"In a similar vein, 66 per cent expressed the need for the establishment of the Developers Guarantee Fund to protect buyers against loss of funds due to bankruptcy or fraudulent activities by developers.
"These findings underscore the need for stronger policies to safeguard buyer interest and boost confidence in the property market," he added.