The price of construction materials has continued to rise since the end of last year. Contractors are often faced with starting construction at a loss with severe labour shortages and soaring labour costs. Housing prices for new projects are expected to rise by 2% to 3% in the future.
Construction companies are appealing to the Federal Government to immediately address the hike in prices of building materials, especially steel. It is reported that some contractors simply chose to stop work when they could not afford the cost.
The price increase of building materials this time is the most outrageous and unusual in the past 10 years. Building materials that have seen soaring include steel, plastic water pipes, etc. The price of iron alone has risen by 90% since the end of last year.
Johor Master Builders Association (JMBA) president Tee See Kim said the price of steel had increased from RM3,100 per tonne in the third quarter of last year to RM3,500 to date.
The prices of PVC pipes and aluminium alloy, he said, also went up between 30% and 40%, depending on the size.
The cost of materials like sand, cement and bitumen had also been on the rise.
Many contractors still feeling the effects of revenue losses caused by the various lockdowns, the price hikes have added additional pressure.
He stressed that the hike in building material prices, if not controlled by the Federal Government, would have repercussions on the construction and building industry. It would be 10% to 20% more costly to construct industrial buildings.
In the case of residential properties, the effects of the increase will ultimately be passed on to buyers through higher property prices.
This was echoed by the Master Builders Association of Malaysia, who said price increases are particularly damaging to smaller stakeholders, who may not have predicted the cost of adhering to Covid-19 standard operating procedures, like testing workers and operating with a limited workforce.
“The government should implement strict control over prices of construction materials to prevent cartels and monopolies taking advantage of these,” it said.
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