By Sheeda Fathil
SHAH ALAM, March 31 — The country's property sector is expected to face pressure following rising construction costs due to the West Asia conflict, although its actual impact is only expected to be felt in about six months' time.
Universiti Teknologi Mara's Faculty of Built Environment senior lecturer Azizul Azli Ahmad the initial impact remains manageable, thereby delaying the cost increases in the near term.
“Typically, the impact on the construction sector comes with a lag of about six months, as some materials are already available in the market.
“What developers are most concerned about now is the impact on raw materials, whether it is steel, transportation costs or labour costs, all of which are expected to rise,” he told Media Selangor.
Azizul said rising costs of raw materials, labour and logistics will directly increase overall construction expenses, ultimately affecting property prices.
However, he predicts price increases to remain moderate at the initial stage, at around three to five per cent, due to the sector’s relatively thin construction margins.
He added that monetary policies like the Overnight Policy Rate (OPR) play a critical role in determining the property market's direction in the near term.
"The costs of wage, labour and raw materials will all increase, so indirectly, house prices will also go up. However, they are unlikely to be as steep as 40 to 50 per cent, as reported by certain parties.
"The current OPR is also stable. We just don't know what the government policy will be until May. If the rate changes, property demand will certainly change too."
Azizul said the energy crisis and rising oil prices are also expected to influence future development designs, including a shift towards more energy-efficient solutions like incorporating solar panels and cost-saving materials.
