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KUCHING, Nov 22: There will be a huge demand for materials to support production activities with the reopening of economic sectors under Phases 3 and 4 of the National Recovery Plan (NRP).
In stating this, Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman Datuk Sim Kiang Chiok said eventhough the price index is only showing a small increase, the effect will be significant over a period of time with continuous increase.
He said that the sudden surge of demand in Malaysia has created a shortage of supply with major economic powerhouse countries also opening up their economies.
“However, the increase in demand cannot be matched by the supply of production in logistics and our manpower requirements,” he said in a statement today.
He also mentioned that oil and gas demand has also surged, causing an increase in its price including the cost of production and transportation.
“The lower purchasing power of our Malaysian ringgit, as our exchange rates to US dollar and other major currencies has dropped, has also caused the price to increase for imported building materials.
“Therefore, developers need to absorb the increase in cost if the properties are sold with the committed sales price while for unsold properties, developers can adjust the price to absorb the increase in cost,” he added.
He further said contractors with contracts that have the ‘variation of material price’ clause can claim for the increase in price which will help to alleviate the increase in construction cost.
Additionally, he said manpower shortage will also cause an increase in construction cost and in time delay as work will be more expensive with demand of higher wages.
He also expressed his worry as the international borders are not open yet and many 3D (dangerous, dirty, and difficult) jobs are still not being filled.
“With our country’s high Covid-19 immunisation rate, we can open up our economy to save our livelihood.
“However, much time is needed to be given for our country’s economy and businesses to catch up and accelerate back to the pre-Covid level.
“The government can also help with temporary price control for essential building materials so that the price increase can be controlled and be absorbed by the market slowly without much shock to our economy.” — DayakDaily