KOTA KINABALU, Mar 30 — Property prices will increase by at least 20 per cent in Sabah next year due to higher construction costs, said Sabah Housing and Real Estate Developers Association (Shareda) president Datuk Chua Soon Ping.
He said a survey conducted by Real Estate and Housing Developers’ Association Malaysia (Rehda) stated that construction costs were expected to surge 19 per cent in 2022 due to rise in prices of building materials, wages and financing costs.
However, Chua pointed out that Rehda has not taken into consideration the Ukraine-Russia war, petrol price hike and regional difference between East and West Malaysia.
He said Sabah’s construction cost may increase by 25 per cent or more, due to higher logistics costs to import materials to Sabah.
Without government’s control or policy, he said the cost may even increase to 30 per cent.
“Houses to be launched next year are likely to see an increase of 20 per cent in pricing, and the new minimum wage of RM1,500, shortage of workers and higher risks borne by contractors may even force developers to price their properties much higher.”
To minimise construction risk, Chua said Shareda would tap into big data analytics in real estate development in Sabah on the data of approved Advertising Permit and Developer’s License (APDL) projects from the Ministry of Local Government and Housing.
The data collected will provide guidelines and predictions for the market and types of properties preferred in the future.
“We use this data to analyse and stagger our developments,” he said after the signing of a Memorandum of Agreement (MOA) between Shareda and Tunku Abdul Rahman University College (TAR UC) to provide a first-of-its-kind course on property development.
The event was witnessed by Datuk Roland Chia, Political Secretary to the Chief Minister and director of Construction Industry Development Board (CIDB).
On the measures Shareda take to control the rising property price, Chua said the association had to work with the government to simplify the policy.
In addition, he said Shareda sought to have the government’s green light to allow property developers to vary their selling price.
He explained that property developers currently were not allowed to raise their selling price for three years due to APDL regulations.
“We are talking to the government to perhaps allow our price to fluctuate like government contractors, in that case, we will not price our property so high as the risks have been reduced.
“Contractors will not set their prices so high because of the risk of maintaining the prices for the next three years.”
Meanwhile, Chia said a task force chaired by the Chief Secretary of the federal Ministry of Works had been set up to engage stakeholders from the public and private sectors to discuss how to mitigate the price hike of construction materials.
He said he had requested for Shareda and Sarawak Housing and Real Estate Developers’ Association (Sheda) to be included in the engagement session.
He further said the variation of price was gradually implemented at the federal level.
“At the state level, perhaps the stakeholders will negotiate with the State Government on the variation of price.”
He also said the Malaysia Construction Academy (ABM) Sabah had started its testing centre in Telipok, which eliminated the need for contractors to send their materials for testing in Kuala Lumpur, thereby reducing the logistics costs.
Chia added that ABM Sabah’s main campus in Papar was expected to start construction this year.
He said the campus, which has a capacity of 400, would allow locals to be trained for the construction industry. — Borneo Post
