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The recent surge in construction material costs has become a global concern, impacting the property development industry worldwide. In Malaysia, this trend isn’t an exception. While developers may not necessarily be aiming for higher profit margins amidst these rising costs, it’s inevitable that the final product, the property itself, will be affected.

Sources Confirming the Trend:

• The Real Estate and Housing Developers’ Association (REHDA) of Malaysia conducted a survey in late 2023. This survey revealed that a whopping 91% of respondents experienced significant price hikes in building materials compared to previous years.
• The Department of Statistics Malaysia also confirms the rise in material costs. For example, the average price of sand jumped by 27.25% from December 2022 to December 2023.

Inflation’s Domino Effect:

This increase in construction costs is just one piece of the puzzle. Malaysia, like many other countries, has been experiencing a period of post-pandemic economic recovery. This, coupled with global inflation, has led to price hikes across various sectors. Property rental demand has surged, causing a significant rise in rental prices, with some areas experiencing increases of up to 30% year-on-year. Even services like property management, including handyman repairs, have seen price adjustments due to rising operational costs. This domino effect demonstrates how inflation impacts every facet of our lives, not just property prices.

Looking Ahead:

The impact of rising construction costs on property prices is undeniable. While developers may strive to maintain profitability, the cost of materials will inevitably be reflected in the final price of the property.

Call to Action:

For property investors, staying informed about market trends is crucial. Understanding the factors influencing property prices, including construction costs and inflation, allows for better investment decisions. Consider exploring alternative investment options or focusing on areas with higher rental yields to navigate the changing market landscape.

Category: Property Investment, Market Trends

Tags: Construction Costs, Property Prices, Inflation, Malaysia Property Market, Rental Market, Property Management, Investment Strategies