BERJAYA Land Bhd (BLand) says the price of properties will continue to rise, given the higher building materials and labour costs.
BLand chief executive officer Datuk Francis Ng Sooi Lin expressed his concern about the goods and services tax (GST) once it is implemented in April next year.
He said the GST will affect everyone across the board, including property developers and house buyers, as the prices of raw materials, goods and services are raised further.
According to him, there is no way developers will be able to lower the price of properties.
“If you want to buy a property, do it now as the longer you wait, the more you will end up paying. Raw material prices have increased by as much as 30 per cent since 2009 and they keep on increasing.
“For developers, if profits are anything less than 10 per cent, then it is not worth doing. There are other costs to factor in, including fees that need to be settled,” he said in an interview, here, recently.
Berjaya Land, which is the property arm of Berjaya Corp Bhd, has ongoing projects in Malaysia, South Korea, Japan, China, Thailand and Vietnam.
Its flagship projects include Vasana 25@Seputeh Heights, The Peak@TamanTAR, Berjaya Central Park in Kuala Lumpur, Berjaya Jeju Resort in South Korea, and Berjaya Great Mall of China in Yanjiao City, China.
For the RM2 billion Berjaya Central Park in Jalan Ampang, Ng expects the project to contribute between 20 and 25 per cent to the company’s bottom line.
Ng said the cost of the project, comprising Menara Bangkok Bank and The Ritz Carlton Residences, has gone up by more than 10 per cent to RM1.2 billion in the last four years. This includes land cost, which was acquired around 14 years ago for RM790 per sq ft.
The Ritz Carlton Residences, which will be launched this month, is selling at more than RM2,500 per sq ft.
“I don’t think the local property market will ever crash as it is supported by local buyers. Given the choice of the right locations and prices, we are not short of buyers.
“If you have a market crash, it is because the interest rates have shot up drastically. It is still a safe play in Malaysia,” Ng said.