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Kota Kinabalu: Members of the public planning to purchase homes or invest in property should do so now before prices of new developments rise following escalating prices of global fuel and construction costs.

Sabah Housing and Real Estate Developers Association (Shareda) President Datuk Johnny Wong Chen Yee said ongoing geopolitical tensions linked to the Iran (West Asia) conflict, which may prolong for the next one year or so, had triggered a significant increase in unsubsidised fuel prices which in turn affected the construction and manufacturing sectors.

He said developers are facing mounting cost pressures as machinery used in construction relied heavily on unsubsidised diesel, the price of which had doubled from between RM2.80 and RM3 previously to RM5.80 and RM6 per litre.

“This is affecting the entire construction chain, from the beginning of development until completion,” he told a press conference after chairing Shareda’s 33rd Annual general Meeting (AGM), here.

Wong said building material prices have also gone up due to higher fuel-related production costs.

He said the price of some materials has increased by between 25 and 60 per cent, while fuel-based products such as paint has increased by as much as 60 to 100 per cent.

“Plastic products such as PVC water pipes have also increased by between 40 and 60 per cent,” he said.

Johnny said the rise in material and operational costs have pushed up overall development costs by between 20 and 30 per cent, severely squeezing developers’ profit margins.

Wong said residential property prices remained subject to government approval, where developers are required to submit costing details to local authorities, with profit margins capped at between 25 and 30 per cent.

He warned that future projects would inevitably see higher selling prices, particularly for new projects.

“My advice to the public is to better buy now because many existing units are already completed or nearing completion and the prices are still manageable.

“For new property developments, prices will definitely increase by at least 15 to 30 per cent,” he said.

On another issue, Johnny said Shareda is strengthening efforts to promote sustainable development in the State through collaboration on green certification initiatives aimed at encouraging environmentally friendly property projects.

He said Shareda is working closely with Green+RE, one of Malaysia’s leading green certification bodies, to expand green-certified developments in Sabah.

He said Green+RE currently accounts for about 80 per cent of Malaysia’s green-certified development area, making it the country’s largest certification body in the sector.

“We have tied up with Green+RE to move into green certification,” he said.

Johnny said the move aligns with efforts to preserve Sabah’s natural environment and strengthen the State’s reputation for its rich natural resources and greenery.

“Green certification is one way to help protect the environment. Sabah is already famous for its natural resources and green surroundings, so this is one way to preserve them,” he said.

He added that green-certified developments would also benefit developers financially as the Government and financial institutions increasingly encourage sustainable projects through green financing initiatives.

“There are now moves by the Government to encourage banks to provide more green loans. This will be good for developers because they can enjoy incentives by moving into green development,” he said.

Johnny said Shareda would continue engaging with the Government to seek additional incentives that could eventually benefit homebuyers and end-users.

“Some incentives are already available, but we are still asking the Government to provide more so that developers can pass the benefits on to purchasers,” he said.

Shareda’s property exhibition scheduled on July 10 to 12 is expected to feature a wide range of housing and investment opportunities.