KOTA KINABALU: The yearly surge in prices of imported building materials could dampen efforts to keep house prices down.
Sabah Housing and Real Estate Developers Association (Shareda) president Datuk Chua Soon Ping said the increase in freight charges will further burden the already increasing costs of building materials.
"As such, the construction industry will be adversely affected, and will eventually result in higher house prices for consumers," he said.
Chua was responding to a news report that sea freight charges from China to Kota Kinabalu had increased by nearly 300 per cent on a year-to-year basis.
According to the report, the costs for a container from Guangzhou, China to Kota Kinabalu, the capital city of Sabah, increased from approximately US$800 (RM3,326) in 2019 to US$2,200 (RM9,143) this year. And the trend is likely to continue into next year.
"The increase in freight charges will further burden the already increasing cost of building materials.
Since the Covid-19 pandemic, he said the development and construction industries have been badly hit by the rapid increase in the cost of materials.
He cited steel bars which is a key material for high rise buildings, saw prices jump by 25 per cent from RM2,180 (Jan 2020) to RM2,900 (Mar 2021).
The price surge in materials and logistics are adding pressure to an industry that is already burdened by the unexpected costs brought on by the pandemic.
"The impact is more profound especially on developers who are building affordable housing, as they face much higher risks as a result of the rising building costs.
"Shareda and its members are constantly finding ways to make houses more affordable in Sabah, unfortunately incidents like these are making such efforts an uphill battle.
"With the absence of options in Sabah, the construction industry relies heavily on imports of goods and materials, and we will always be exposed to the risk of price fluctuations in the macro environment, including currencies.
"The only way to reduce our exposure is to increase local manufacturing and optimise the supply chain of all construction materials, removing unnecessary middleman in the process," Chua said.
He added the state government has done the right thing by banning the export of scrap iron early this month.
"We hope the government will encourage the manufacturing of materials locally to reduce our reliance on imported goods."