KUCHING: Housing prices may rise due to the increase in construction cost, says director of Sim Swee Yong Development and Construction SB, Datuk Sim Kiang Chiok.
Sim said that building cost index (BCI) compiled in Feb 2022 reported an increasing trend for the construction demands for steel bars and other supplies including aluminium, copper and zinc.
“Meanwhile, the BCI including steel bars increased between 0.3 and 0.5 per cent over the previous month and for almost all building categories.
“House prices are determined by a number of factors, including construction costs, land costs, compliance costs, capital interest costs, utility connections, overhead, marketing, legal costs, consultants’ fees, and other expenses.
“So, the growth in the BCI will affecting the cost of building houses,” he told New Sarawak Tribune on Thursday (March 10) regarding the statement by department of statistics on the rise of building materials cost index.
He further said that although house developers might increase the selling price, this would only be to a certain extend as it would affect the affordability factor.
However, he said that there would not be any price increase for sold or committed property.
He believed that recently launched houses might see an increase in price that subsequently would affect the affordability of the houses.
“Banks and valuers have to take into account of this increase in material price so that end-financing with the right loan margin can still be given for house buyers.
“Now is a good time to buy a house that are almost or fully completed with banks that provides a low interest.
“The Ukraine-Russia War will also affect prices of commodities to rise together with the oil and gas that afterward have a knock-on effect on the construction cost in Sarawak and Malaysia.”
