The reintroduction of the Sales and Services Tax (SST), slated in September, is unlikely to reduce house prices despite cost savings of at least 1% to 2% for property developers, said Paramount Corp Bhd group CEO and director Jeffrey Chew.
He explained that this was because construction costs account for just half of the overall development cost and the small savings may or may not be passed back to consumers, depending on the price of the properties.

“Some of the products building materials are tax exempted, but bear in mind that if you look at the sales price… which we call it as the gross development value, within that there is the land cost which is roughly 18-20%.

“Then, you have a lot of soft costs including financing cost, contribution cost that will take another 10-15%.

“The actual construction cost is about 50% or slightly less than 50%, so when you talk about material cost in construction, it is actually a small portion.

“SST also applies to services as well, such as consultancy fees, architect fees – those are under the SST service tax.

“For us in the property sector, the change of the SST from the Goods and Service Tax, the cost comes down by only 1-2%.

“Sometimes we pass it back to the buyer, sometimes we use it to absorb the cost for the increase in raw materials,” Chew told the media at an analyst and fund manager’s briefing for Paramount Corp’s first half of 2018 financial results.

He added that the 1-2% of the cost savings may be passed on to their customers either through a better price structure, more fittings in their property or better-quality products to their customers.

“Again, it depends on the demand and supply. If the properties that we launch are very cheap and in a good location, then the price will probably not come down.

“But for properties that are not selling very well, we will see the possibility of the developer giving more discounts on that because the costs have been lowered.

“So again, it depends on market forces and [prices are] market-driven. We know that Malaysia is a very dynamic open market and market force will drive the price. But definitely, there will be an element of price containment and also a little bit of price reduction of the products,” said Chew.

Paramount’s Utropolis@Batu Kawan in Penang has seen strong demand, especially being located next to Design Village, as well as the ongoing construction works of the KDU campus, Aspen Vision City and the IKEA outlet.

Source: EdgeProp.my

The cancellation of the controversial Pan Island Link 1 (PIL 1) highway project is not an option. Chief Minister Chow Kon Yeow said today the project would begin as soon as the Federal Government gave its approval.

“If it is not rejected (by the Federal Government), then we will make the necessary adjustments (based on feedbacks received) before we kick-start the project,” he said.

“For us, this project is crucial to alleviate traffic congestion on the island. We intend to start building the most-needed section of PIL 1, which is the last section from Bukit Gedung to the Tun Dr Lim Chong Eu Expressway.

“The construction of PIL 1 from Bukit Gedung to the Bayan Lepas interchange will have a major positive impact by providing relief to Penangites who live and work in the Sungai Ara, Relau, Bayan Baru and Bayan Lepas Free Industrial Zone areas that are heavily congested on working days.”

He said the state government would hold a town hall meeting on the PIL 1 highway project early next month, pending official notification by the Environment Department. He said details would be announced soon.

Chow said the state government had engaged more than 16,500 stakeholders on its transport initiatives, which included PIL 1, light rail transit and Penang South Reclamation projects.

“We have conducted 965 engagement sessions since December 2015 and we will continue to hold similar sessions, with several planned soon, he added, brushing aside claims that the state government had not been transparent about the Penang Transport Master Plan (PTMP), which includes PIL 1.

“In fact, this is the largest-ever engagement sessions for any projects, not only in Penang, but in the country.”

He added that, although it was not required by law, the state had taken the initiative to put the Request For Proposal documents for the project on public display.

The 19.5km PIL 1 highway includes a 10km tunnel that cuts through the hills in Bukit Bendera, Paya Terubong and Sungai Ara to alleviate traffic congestion. It will also cut across the Youth Park.

The multi-billion ringgit highway will allow traffic to go directly from Gurney Drive to Gottlieb Road, Youth Park, Sungai Keluang and the Second Penang Bridge, cutting travelling time by more than half. The highway project will affect 226 buildings.

Numerous protests have been held by Penangites and non-governmental organisations to call for the PIL 1 to be scrapped and for the PTMP to be reviewed.

Source: NST Online

Want to learn more about investing in property and what SST & GST means to property market? Hear what the experts say at Setia Sky Vista Sales Suites @ Lebuh Relau, Penang.

25/08/18 2:30 pm
“Is this the time to invest in properties” by Miichael Yeoh.

26/08/18 2:30pm
“GST vs SST. What it means to property investor” by Richard Oon.

[Sponsored Ad]

A proposed 10-storey serviced apartment development by Multi Majestic Sdn. Bhd. at Sungai Bakap. Located along Jalan Sentosa, just a stone’s throw away from Sungai Bakai Hospital. It is only 20 minutes drive away from Penang Second Bridge via North-South Expressway through Jawi interchange.

This is probably going to be one the first serviced apartment at Sungai Bakap, offering 24 residential units with facilities.

The project is still pending for approval. More details to be available upon project launch.

Project Name: (to be confirmed)
Location : Sungai Bakap
Property Type : Serviced apartment
Built-up Size: (to be confirmed)
Total Units: 24
Indicative Price: (to be confirmed)
Last Updated: Jan 2020
Developer : Multi Majestic Sdn. Bhd.

Location Map:

The proposed Penang Sky Cab project is still in the works, said Penang Chief Minister Chow Kon Yeow.

Chow said Penang Sentral has already obtained approval for its detailed environment impact assessment (DEIA).

“The project is not scrapped. It is still very active. The ports of landing may be adjusted and the alignment will be changed,” he told reporters after a site visit to Penang Sentral on Tuesday.

The Penang lawmaker said the alignment may be changed so that it is closer to the inner city of George Town.

The Penang Sky Cab project is a 3km cable car system that will traverse the channel between the island and the mainland.

Undertaken by Penang Sentral Sdn Bhd, which is under the Malaysian Resources Corporation Berhad (MRCB), the project was first announced in 2015.

Penang Sentral reportedly obtained approval from the Department of Environment for its DEIA in 2016.

The first phase was initially expected to be completed this year but work has yet to commence on the project.

The cable car system will connect Penang Sentral in Butterworth with George Town on the island.

The first phase of the project will have 40 cabins capable of transporting about 1,000 passengers both ways per hour.

Source: Malay Mail