Some of the houses in Bandar Saujana Utama
With spiralling construction costs and more than a dozen ongoing projects to complete, Glomac Bhd group managing director Datuk F.D. Iskandar has every reason to be concerned.
He is not alone in this predicament, for the whole housing and construction industry is facing the same problem.
As vice-president of the Real Estate & Housing Developers' Association (Rehda), Iskandar has also received many complaints from members that contractors have asked for an upward revision of their contract prices.
Some have even refused to participate in new tenders while others have threatened to walk away.
The industry is also faced with a growing shortage of certain raw materials like steel.
“The 9th Malaysia Plan (9MP) has not even started and there is already a big shortage of steel which has seen prices skyrocketed from RM2,350 per tonne to RM4,000 per tonne,” he said, adding that the big projects under the 9MP would need a lot of steel.
China, Iskandar said, was believed to be consuming a third of the global supply of steel for its Olympics projects and China's demand for steel was expected to go up with the massive reconstruction of Sichuan Province after the devastating earthquake in May.
He said Rehda, the International Real Estate Federation (Fiabci) Malaysia Chapter and Master Builders Association of Malaysia had made representations to the Government to allow controlled items like steel to be an open item with no ceiling prices.
Rehda has urged the Government to also abolish its decision to charge 10% import duty on cement importers and instead impose 10% to 20% export duty on all cement and steel materials to ensure adequate supply.
Iskandar said it was “a joke” that despite being a steel exporting country, Malaysia still faced a shortage of steel while contractors in Singapore could buy steel at a cheaper rate.
He said with soaring inflation, people would have lesser disposal income and might hive off purchase of properties.
Iskandar said the Government had given the “green light” for Fiabci Malaysia and Rehda to help promote Malaysian real estate to foreign investors under the Malaysia Property Incorporated scheme.
“We are still brain-storming. Malaysia needs to re-brand itself, be more transparent and attract more foreign investments,” he added.
By The Star
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