KUALA LUMPUR – Government intervention may be necessary if the material cost problem is prolonged and becomes too serious, the Real Estate and Housing Developers' Association Malaysia (Rehda) said.
President Datuk Soam Heng Choon said industry players have always advocated for a free market, but he noted that the global phenomena such as rising prices of oil, copper, bauxite (to manufacture aluminium), and iron ore (to manufacture steel) over the past 12 months was inevitable.
“In fact, this week alone, there has been a significant increase in aluminium, copper and steel prices,” he told a press conference to announce Rehda’s first half of 2021 (1H21) property market survey and outlook for 2H21 and 1H22.
Soam said one or two months ago, the steel price came down from RM3,400 to RM3,100 but as of yesterday, it went back to the RM3,300 to RM3,400 level.
“So, the prices are unstable and still on a high side,” he added.
The locally produced brick price has also escalated due to the lockdowns, but this issue is expected to normalise in the next few months as restrictions are lifted.
“As for others like cooper, it will actually cause a substantial increase in other related steel materials from reinforcement bar, aluminium windows, mechanical and electrical equipment or transformer.
So, various parties have been engaging the government, especially the Works Ministry to see how they can come in to assist the industry, and we believe a robust engagement needs to be done between the industry and the manufacturers to help stabilise the current situation,” he noted.
Soam said Rehda anticipates the full recovery of the industry to take place from 2022 as evidenced in the survey, in which respondents were more optimistic over 1H22's outlook, provided the economy, employment market and salaries were on the upswing.
87% of the respondents believe the endemic phase will help accelerate recovery of the property market between six to 24 months.
Most of the total 180 respondents were pessimistic of the market in 2H21. Only 36%, were planning to launch their projects, while a majority (64%) have no projects to launch, citing mainly unfavourable market conditions and higher unsold stock.
89% of those with future launches expect sales to be 50% and below. A total 9,319 stratas, 5,549 landed, and 208 commercial units will be introduced to the market in 2H21.
Developers also look forward to participating in the Home Ownership Programme (HOC) to boost sales.
He said 63 respondents launched their projects in 1H21, with most units sold being apartments/condominium and two/three-storey terrace houses with selling prices typically between RM250,001 and RM500,000.
As for commercial units, a total 141 units were launched and bought by mostly first-time buyers.
On unsold units, he said 82% and 67% of the respondents have less than 30% residential and commercial units, respectively. – Bernama, October 21, 2021
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