Sheda Kuching chief on factors affecting new property prices

Sim Kiang Chiok

KUCHING, June 19: The cost of land, construction and compliance, upfront capital contribution as well as time and resources used are among the factors used to determine new property prices.

Sarawak Housing and Real Estate Developers Association (Sheda) Kuching Branch chairman Sim Kiang Chiok explained that there were various types of costs associated with property development.

On land and compliance costs, he said Sheda had forwarded several proposals to the state government on how to reduce the cost of building houses.

“One is to improve basic infrastructure such as roads to open up more land for housing. Second, to further increase the density of the number of houses allowed to be built per acre of land,” he said in a statement today.

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Third, to increase land supply by allowing automatic conversion of all land to mixed zone within a 20km radius of cities and 10km within towns. Fourth, to reduce the compliance cost by reducing the approval time for planning layout, building plan, engineering plan, developer licence, advertising permit, road certification and occupation permit.

Sim also suggested to the government to enable self-certification by the consulting architect and engineer of the development to certify road certificates and occupation permit like in West Malaysia’s Certification of Completion and Compliance or CCC, in short.

On the construction cost of building houses, he explained that there were many components involved but the most basic is cement.

“Cement is used for structure as concrete, cementing bricks to plastering, screeding as in building finishes irrespective of the type of houses, be it high end or affordable,” he said.

Hence, he pointed out that any increase in price for the basic material would affect the construction cost of building as well as the price of houses. This is because there are no other substitutes.

“The other important material is steel, which is needed in the structure of all modern design buildings. So contractors and developers will definitely be affected when the prices are adjusted upward.

“This cost will be passed on to the end-users or house buyers. Ten years ago in Malaysia, we used to have price control for these basic materials, but they were lifted and manufacturers were free to make adjustments to their prices subject to supply and demand or market forces,” he added.

Sim hoped the prices of these basic building materials would not be increased too much and too quickly so that the construction industry and property development sector could continue to build houses at affordable prices for all. — DayakDaily