House prices will go up by "one to two percent" with the implemenation of the goods and service tax next April, Deputy Finance Minister Ahmad Maslan said.

However, he was quoted by Bernama as saying that this will only be temporary.

"The increase is only one to two percent, and not three percent as announced by the Urban Well-being, Housing and Local Government Ministry before this," he said.

Urban Well-being, Housing and Local Government Minister Abdul Rahmad Dahlan cited a Real Estate and Housing Developers Association (Rehda) survey as saying that the hike will be three percent.

This is based on a rise in cost of building materials, due to the GST.

However, Ahmad said the rise would not be so high as the government has introduced real property gains tax from 15 percent to 30 percent.

He added that his one to two percent estimation is based on Customs Department figures.

The goverment also raised the threshold for foreign ownership from RM500,000 to RM1 million and bars developers from  undertaking projects based on the Developer Interest Bearing Scheme.

Related story

Deputy minister proposes RON95 price cut