KOTA KINABALU, April 13 — Property prices in Sabah are expected to rise further as land and construction material costs spike.

The price of land in Sabah is expected to increase by 10 to 15 per cent in the second quarter of this year as developers consider offsetting the increase in the cost of building materials.

State Housing and Urban Development Board (LPPB) chairman Datuk Masiung Banah said that the inflation trend in the price of building materials such as cement, bricks, fertiliser and wood has seen a significant price spike since January.

He cited a report by the Department of Statistics Malaysia (DOSM) earlier this year, which showed a spike in the price of four building materials such as cement by 15 per cent, fertiliser by 20 per cent, bricks by 12 per cent and wood by 10 per cent.

According to him, the already expensive property market in Sabah is expected to become more expensive this year due to the sentiment of a new increase in raw materials, in addition to issues in the global supply chain.

Masiung said that the cost of transportation and logistics involving the process of merchant ship exchanges at Port Klang to Sabah also contributed to the increase in the price of building materials.

The Kuamut assemblyman stressed that there needs to be joint action between the government, developers, suppliers and buyers to tackle this issue.

“For example, the government can provide subsidies for certain materials that have increased as it may help stabilise material prices in the short term.

“The government can also set a ceiling price for the construction materials involved, but this is risky for the houses and commercial buildings being built because the developers have to reduce the scope of the project to stay within the set budget limit,” he said.

He said if this situation occurs, it can cause problems with the quality of construction and safety of the buildings involved.

According to him, three main factors are causing the increase in construction material prices, namely constraints in the global supply chain, increased demand for mega projects and increased labour costs.

Masiung reminded the government not to impose new taxes on construction industry developers as it could contribute to the increase in the cost of houses and commercial buildings. — The Borneo Post