KUALA LUMPUR – Additional costs in the property sector caused by steep hikes in building materials, labour cost and redundant policies might be too punitive for development projects to become economically viable, said the Real Estate and Housing Developers’ Association (Rehda) Malaysia president Datuk N. K. Tong
He said that while property developers might have been able to absorb the increased costs in the past, the various challenges and impositions in recent times had led to a breach of the tolerance level on the part of developers.
“In some cases, the additional costs may be too punitive for development projects to become economically viable.
“I am sure developers would agree with me that undertaking development in Malaysia is not as straightforward as the industry is highly regulated by over 50 laws,” he said in his speech at the Rehda’s 50th-anniversary dinner here, today.
Tong said that private sector housing development in Malaysia was not limited to the mere provision of building houses but included extensive requirements such as providing infrastructure and amenities, ensuring proper maintenance and management, especially for strata schemes, prioritising safety, and promoting community living.
“Hence, more often than not, developers have become the ‘target’ to pay or contribute to any new compliance imposed by the authorities or private utility companies,” he added.
Tong said the Rehda Property Industry Survey for the second half of 2022 reported more than 20% average price increase in cement, steel, aluminium, and bricks, as well as an annual average increase of 17% in construction costs.
“The Statistics Department also recorded that the unit price index for cement increased 9.6% in February 2023 compared to February 2022, with other materials likely increasing dramatically over the pandemic as well,” he said. – Bernama, March 15, 2023
