Eyeing GST hit on home prices, Selangor ramps up affordable housing effort

BATU ARANG, Jan 22 — The Selangor government launched today an affordable housing project specifically catering to low- and middle-income families to mitigate the expected rise in property prices once the Goods and Services Tax (GST) is implemented in April.

In his speech when launching the Selangor State Development Corporation's (PKNS) Rumah Selangorku Idaman PKNS Kota Puteri residential project, Mentri Besar Azmin Ali assured the state's residents that initiatives will be implemented to ensure the continued development of affordable homes, despite the impending increase of property prices.

"The trend in the property sector will see prices increase due to expensive building materials because of the GST," he said. "The state government has set affordable houses, by PKNS and private developers, at no more than RM250,000," Azmin added.

Over 15,000 affordable houses will be built in the next two to three years, the MB said, and incentives will be offered to developers to encourage building cheaper homes within the city limits.

"If private companies want to join, many incentives will be available including a discount on the premium of land from 25 per cent to 10 per cent," he said.

In October, US-based urban development researcher Demographic said Malaysia had a "severely unaffordable" residential homes market, with housing even more out of reach from its residents than in Singapore, Japan and the United States.

Demographic's report was cited by Singaporean daily Straits Times as highlighting the number of Malaysians who continue to be locked out of the residential housing sector despite the federal government’s attempt at helping first-time home buyers.