Rehda: Home buyers to see spike in housing price as construction, labour cost increase

KELANA JAYA, Feb 22 — The Real Estate and Housing Developers’ Association Malaysia (Rehda) today said their members are inclined to increase the housing price this year due to several factors.

Its president Datuk NK Tong said among the biggest issue found in their reports are the high cost of building materials as well as increasing labour costs which saw the average increase of construction cost to 17 per cent in the second half of 2022 (2H 2022).

He said the economy now is also “inflationary” and will remain so for a while, thus cost will remain high.

However, Tong did not reveal how much increase housing developers had asked, only that it will be a “two digit” in percentage increase.

“That is why I said the developers have no choice but to consider increasing the price.

“To protect the homeowners that they sell the homes to in order to complete the project,” he said during the question and answer session at the media briefing for Rehda property industry survey second half of 2022 and market outlook for 2023.

The survey, which included 136 respondents from developers who are Rehda members, saw that while the current economy situations had improved from 2021 and the pandemic, the cost increase had affected operations.

The study showed in 2H 2022, 75 per cent of respondents reported an average increase of 13 per cent in the overall costs of doing business (1H 2022:82 per cent of respondents; 17 per cent average increase).

Meanwhile, 94 per cent of respondents are said to be affected by the current economic scenario, and have taken various cost-cutting measures including freezing recruitment, reducing salary, rescheduling the launch of planned projects and reducing the scale of launches.

“Similar to 1H 2022, respondents reported that the three main cost components affecting cash flow were material and labour cost, compliance cost including but not limited to policies, contributions, planning requirements and so forth and land cost,” he said.

However, the developers are seen to be more optimistic in 2H 2022 with 66 per cent of respondents stating that they are optimistic with another 4 per cent, very optimistic, compared to 55 per cent optimistic and 3 per cent very optimistic in the first half last year.

2H 2022 also saw the launching of 9,669 units, an increase of 23 per cent from 7,843 units in 1H 2022.

The most popular property are residential serviced apartment and two-storey terraces priced below RM500,000 — especially in Seremban and Johor Baru.

However 61 per cent of the respondents reported that they have unsold residential units with the majority of them priced above RM1 million.

This is due to the end-financing loan rejections, unreleased Bumiputera plot and low demand.