Published Date : Sep 08, 2015
The depreciating Malaysian currency, ringgit, is likely to increase the prices of imported construction materials by 20%. Datuk Francis Goh, President of Sabah Housing and Real Estate Developers Association stated that the hardware suppliers in the State will have to put in more money to import these construction materials. He further added that the rise will be felt in prices of items such as lighting equipment and lights, sanitary ware, and iron bars. Effectively this rise in the prices of goods will be transferred to developers and then consumers. Unfortunately this is expected to make the prices of properties in Sabah steeper, which are currently facing terrible borrowing policies.
The explanation for this rise seems to quite simple according to Goh. As the ringgit has depreciated to RM4 against US dollar, the prices for construction materials are definitely expected to increase by about 20%. Suppliers had warned Goh of this development, adding that several developers are now careful about their investments. This why the State is witness no new property launches.
The new property launches have dropped by about by 40% to RM1.2 billion in 2015 from RM3.86 billion in the same period last year. In his statement, he urged the government to devise measures that could help the property developers to operate in this chaotic situation. He further added that as the economy is facing a collapse, many could be out of jobs and business if the government fails to do anything. Another 165 industries would suffer miserably if the property sector does not pick up pace as they continue to be heavily dependent.