THE price of residential properties is expected to rise between 5% and 20%, a news report said.

Quoting former Real Estate and Housing Developers’ Association (Rehda) chairman, Tan Hun Beng, StarBiz said a price hike is imminent due to higher construction costs.

The price of concrete has risen 32% to RM258 per cubic metre, while steel bar prices have increased 46% to RM4,100 per tonne.

In addition, the prices of metal roofing and c-purlin have increased by 60% and 95%, respectively, said the report.

“The steep hike in building material costs will impact the selling price of the incoming supply of properties by at least 5-20%, depending on their size and location.

“The hike in selling prices is inevitable as developers are already paying substantially more for their raw materials,” said Tan.

As such, he said there will also be fewer property launches in 2022 due to high construction costs.

According to the latest National Property Information Centre (Napic) report, some 54,836 houses will enter the Penang property market over the next three to four years.

The report showed that about 79% of the new houses are affordable and high-end, priced from RM300,000 onwards.

Tan said this was a primary concern as Napic had indicated that the unsold houses in Penang from the completed, under construction and not yet constructed categories totalled 11,540 units.

In late November, the state government declared that Penang has the second-highest number of unsold properties in Malaysia, with 4,683 completed housing units worth RM3.66 billion.

Assuming that developers had sold some 30% of the 54,836 houses, Tan said there would still be a leftover of 38,385 unsold units. – June 20, 2022.