The development of real estate projects in Malaysia might not be as attractive to developers as it once was as they become economically unviable, given the rising cost of construction.
According to Datuk NK Tong, president of the Real Estate and Housing Developers' Association (Rehda) Malaysia, the additional costs in the real estate sector brought on by sharp increases in building materials, labour costs, and redundant policies imposed on the industry may be too punitive for development projects to become economically viable.
Tong said that the Rehda Property Industry Study for the second half of 2022 revealed an average annual increase in building expenses of 17 per cent as well as a more than 20 per cent increase in the average price of cement, steel, aluminium, and bricks.
He said the Department of Statistics Malaysia also recorded that the unit price index for cement increased 9.6 per cent in February 2023 compared to February 2022, with other materials likely increasing dramatically over the pandemic as well.
"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, yesterday.
Property developers may have been able to endure cost increases in the past, but recent hardships and restrictions have caused them to go over their tolerance limits, he said.
Tong said that the private sector housing development in Malaysia was not limited to the mere provision of building houses, but covered a wide range of criteria, including the supply of infrastructure and amenities, effective maintenance and management, particularly for strata schemes, a priority on safety, and the promotion of communal life.
He added that developers are frequently the "target" for being made to pay for or contribute to any new compliance requirements put in place by the government or private utility firms.
Rehda, meanwhile, was praised for its contribution to the nation's development by Prime Minister Datuk Seri Anwar Ibrahim, who attended the anniversary dinner as the honorary guest of honour.
"One of the pillars of any development is the construction sector and housing developers. You know that you have played a pivotal role (in developing the nation)," he said.
Source: NST.com.myPrev. Article Next Article