Published on: Thursday, August 14, 2014
Kota Kinabalu: New property launches dropped by 60 per cent to RM2 billion compared to RM5.8 billion in the corresponding period last year in terms of project value, signalling a cautious market over new policy changes.
According to Sabah Housing and Real Estate Developers' Association (Shareda) Research Unit, the market was reacting to the tightening of borrowing policies and the upcoming Goods and Services Tax implementation next year.
President Francis Goh (pic) said: "Developers are now adopting a wait-and-see attitude and waiting for the right timing to launch their developments."
He said adjustment to the bank borrowing requirements have resulted in many borrowers slipping below the minimum requirement for loans, although properties continue to be in demand.
He also said the developers are expected to adjust to absorb the six per cent GST when it is implemented on April 1, 2015, adding that property prices may go up by 3 to 4 per cent from next year.
However, the general trend is that many will opt to purchase properties ahead of the GST before the prices eventually increase.
Meanwhile, Goh warned developers not to play up their land acquisition to avoid overheating the prices of land value.
Responding to a report over a RM20 million land acquisition in the city, he said the move will affect the mindset of landowners to mark up their prices amid an already overpriced value at present.
He claimed this would force developers to pay more and jack up the prices of their ready units.
Besides, he said as a member of the Town and Country Planning and Central Board, developers also need to abide by two development restrictions.
One, the density reassure restriction which limits the number of units to 80 an acre and the height restriction which limits the height of building to not more than 40 storeys in compliance with the Department of Civil Aviation requirement.
Towards this, Goh said the developers who purchased the said land could not push for a huge development based on these restrictions, hence it may result in overpriced property units being sold when they are ready.
He advised developers to make thorough research before making any land purchases.