May 14, 2014
Property transactions soaring since 2009 – 2011. Property transactions started tumbling in 2012 and continued in 2013 and should still continue in 2014. What about the effect of GST? Would everyone be rushing to buy 1-2 quarters before GST and push up the prices further and 1-2 quarters after GST, the prices come tumbling down, like what happened in Australia many years ago? CEO-Agency of property consultancy PPC International Sdn Bhd Siva Shanker says that buyers would be snapping up properties one or two quarters before GST but property prices would then find a level and stay there. It is unlikely to follow the example of Australia.
He further said that his personal views are that 2013 and 2014 are slowdown years. 2015 is when the footing is found and recovery would start from 2016 onwards. CH Williams, Talhar & Wong managing director Foo Gee Jen says that he expects an 8-10% jump in price after GST and the landed property at an even stronger 10-15%. He said, he does not see an oversupply in landed but for condo, especially SOHO and SOVO he sees an oversupply already building up.
In my personal view, I think many of us including myself know very little about GST. It is after all the first time in our history that GST will be implemented. Thus, when we hear people saying GST will push prices up, some would immediately make a decision to buy. Haha. Then, when someone says that GST induced price up is temporarily, some may think it’s best to invest in something else first and wait till the situation becomes clear. How long should we wait for the situation to become clear?
Always invest with a big picture in mind. GST is a new form of tax replacing the current one that we have. Do not buy with GST in your mind as the main factor affecting it. This is just like when someone tells you that Stock ABC is going up because so and so is buying into the company. Yes, you may earn big money but it may also meant that you lose big. Fundamentally, why did you buy in the first place. For retirement? Then, there should not be a change just because of GST. For your children? Then, starting earlier is definitely better than later because no one actually knows the best timing to buy.
Happy ‘GST’ thinking if you still think GST is the main reason for buying or not buying.
written on 9 May 2014
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