Property prices in Malaysia are anticipated to continue their significant ascent in the first half of 2024 due to increasing construction costs, according to the Real Estate and Housing Developers Association (Rehda).
Speaking during a media briefing, Rehda President Datuk Nk Tong commented on the Second Half 2023 Property Industry Review and the 2024 Market Forecast, stating that construction material prices had continued to rise following reports of over a 10% annual increase in average prices for sand and concrete by the end of December 2023.
“This implies that construction costs are expected to surge by an average of 15% in the first half of 2024,” he said.
Tong further explained that 91% of survey respondents believed that 2023 witnessed a peak in construction material prices compared to previous years.
“Ultimately, the rise in construction materials means that construction costs will become more expensive. We hope this issue will be effectively addressed, and all industry players will play their part to ensure that the Malaysian people are not burdened by these increases,” he said.
Meanwhile, Tong noted that property market participants remained neutral on business prospects and the real estate industry for the first half of 2024 but were more optimistic about the market in the second half of 2024.
“This can be understood given the challenges faced by the industry, but the higher confidence for the second half of this year indicates that respondents and developers, in general, are still confident that the market will improve,” he added.
Regarding the proposed Urban Redevelopment Act, Tong criticised claims that it would enable developers to seize land for profit as entirely wrong.
As responsible developers, Rehda members have many options to acquire development land elsewhere, which can be easily developed compared to redeveloping existing buildings.
“However, as a strategic initiative, Rehda Malaysia commends the Ministry of Housing and Local Government’s vision, through the Minister, to continue enhancing urban fabric to ensure they remain competitive and attractive globally for the benefit of the people,” he said.
“We are awaiting more specific details involving the Ministry, but we believe they have also carefully studied similar models in the region that have operated successfully for several decades,” he added.
