THE property market in Ipoh remains upbeat as evident by new launches.
But what makes it even more exciting for potential buyers is that developers are not selling them as just property per se.
Many of the launches offer a new concept of lifestyle, with security, convenience and versatility in terms of usage in mind.
In Ipoh, for instance, the latest product is Sovo (small office and versatile office).
When you buy a Sovo, you actually have more than just a roof over your head.
You can use it as a place to stay as well as for business.
You can use it as a weekend home and rent it out for the rest of the time.
The excitement in the current property market in Ipoh in particular is also buoyed by the anticipated development in the city after a lull of some three decades.
Economic growth in Ipoh and the surrounding areas had been very slow following the collapse of the tin mining industry in the 1980s.
Thanks to the better connectivity — existing highways and upcoming highways like the West Coast Expressway (WCE) — Perak in general and Ipoh in particular, has set the stage for the state to bounce back.
Tourism is the way forward in terms of economic growth.
Ipoh, which is famous for good food, is drawing in tourists, especially over the weekends and public holidays.
Some developers are promoting homestay for their Sovo units.
The property market in Ipoh is gaining momentum.
This is despite the concern among some potential buyers over the possible impact on property prices once the GST (goods and services tax) sets in on April 1 next year.
In fact, feedback from several developers showed there is a rush to buy properties before GST sets in.
An increase in property price appears inevitable, even for residential properties which will not be subjected to GST.
The reason being that a property, be it residential or commercial, comprised building components which are subjected to GST.
House Buyers Association Malaysia secretary-general Chang Kim Loong said a 3% to 4% increase in the price of residential properties following GST was considered tolerable.
A developer in Perak said the overall property price would see an increase of between 10% and 15% next year because of the increase in construction cost and GST.
He cited the increase in the price of land and also land-related charges from the government as an example.
“Effective early this year, developers, for instance, have to pay 25% of the land price difference after the status conversion if the piece of land is more than a certain acreage.
“If the value of a piece of agriculture land is RM1mil and it went up to RM10mil after its conversion to land for mix development, the developer will have to pay the local council 25% of the difference in value, that is RM9mil, and this works out to RM2.25mil,” said the developer who requested anonymity.
Despite the increase in the cost of land and construction costs, the developer said the increase in the price of property in Perak would be marginal because the spending power of the people in the state was relatively lower than those in Kuala Lumpur or Petaling Jaya for instance.
“People will not buy if the properties are too expensive,” he said.
According to him, the profit margin of developers in Perak was also relatively lower than that of developers in places like Kuala Lumpur, Petaling Jaya and Penang.
He said this had made it difficult for developers to absorb the drastic increase in cost of construction and other charges.
As the local council went all out to increase its revenue by imposing new charges or increasing the existing charges, the developer said it should take into consideration the interest of the people and also the survival of the property market.
All said and done, the developer said there was a rush to buy properties before GST sets in.