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Prices will increase, after GST. True?

A colleague spoke to me when we left office the other day. He said that he had missed the pre-GST property purchase. His friend told him that after GST is implemented, the property prices will increase. Another friend spoke to me last weekend about a friend who told him that she regretted buying a secondary property for RM300,000 last month. She should have waited because GST is going to cause property prices to go down. The views cannot be wider and it happened to be just few days apart. My colleague spoke to me on Friday and my friend spoke to me on Sunday. So, which is true, or rather more true?
What about prices of majority of all goods? Surely the current frantic buying is the best way to beat the GST, at least for this year? For example, buying one dozen packs of 5kg washing powders. Go to the hypermarket today if you think I am joking. How about buying one dozen packs of one dozen rolls toilet papers? Yes, that’s 144 rolls. It can definitely last one whole year even if the whole family got diarrhoea at the same time. What about foodstuffs? Canned food? What about electrical goods? A new set of sofa? Let us look at majority of all businesses. From the producers of washing powders to toilet papers and canned food and even manufacturer of electrical goods today. Seriously, are we sure that as soon as GST starts, we would all stop buying and these manufacturers would go bankrupt because they COULD NOT sell their goods cheaper or maintain current pricing and absorb that GST increase? However, if each and everyone of us are buying like there’s no tomorrow, do you think they will reduce the price later? Yes, this is the same argument for new cars.
After 1st April, whether property prices go up or not actually depends on the market condition. If anyone could still remember, just in 2012, the prices of all new launches were already reaching for the sky. RM500,000 was totally unheard of. Today, there are so many choices within this range. Was it because of the impending GST? Or was it due to just the usual demand vs supply plus the negative sentiment after 2012 when all the cooling measures started to take effect? Buy if you like that property. Do not buy because of GST.  Do not buy if that property does not fit what you are looking for, keep looking. If we should not rush when we are driving, why should we rush when we are buying a property which may be the largest ever purchase that we would ever have in our lifetime? Happy deciding.
written on 30 Mar 2015
Next suggested article: GST and Property, nothing much, sorry.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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