KOTA KINABALU: Building material costs in Sabah could rise due to increased prices of raw materials imported from Peninsular Malaysia following the diesel subsidies rationalisation.
Sabah Housing and Urban Development Board chairman Datuk Masiung Banah cautioned that the property market in the state could increase in the latter half of the year if steps are not taken to manage rising costs.
"We could see property prices increase by about 10% to 15% in Sabah if no efforts are made to check on the prices of raw materials as well as transport costs," he said.
Masiung noted that an increase in the price of raw materials was reflected in the rise in transport costs in the real estate sector, which is not listed for any subsidies.
"The price of building materials in Peninsular Malaysia has increased between 3% to 5%. Shipping by sea to Sabah will of course result in a new higher price," he said.
Masiung said the logistics costs passing through Port Klang have also contributed to the overall rise in raw material prices.
According to the construction materials cost index released by the Department of Statistics Malaysia last month, the prices of plywood, iron and cement recorded an increase of up to 1.7%.
Masiung said that transportation costs for Sabah and Labuan were inherently higher than in Peninsular Malaysia, further driving up prices in the construction sector.
Despite assurances from the government that diesel price adjustments in Peninsular Malaysia would not affect Sabah and Sarawak's raw material prices, Masiung urged the Domestic Trade and Cost of Living Ministry not only to monitor but also address industry complaints.
