House price hike likely

Penang properties said to increase 5%-10% due to more costly cement

The selling price of properties in Penang will soon surge by 5%-10% following the recent move by Lafarge Malayan Cement to raise cement prices by about 6%, according to housing developers here.

Following Lafarge's announcement, a 50kg bag of cement is now priced at RM17.50, compared to RM16.50 before the hike.

Penang Master Builders & Building Materials Dealers Association president Lim Kai Seng said 60% to 80% of the materials used for a building comprised cement and cement-related materials.

“This is why an increase in cement price will have a significant impact on property prices.

“The other cement manufacturers in the country have sent signals that they will raise prices very soon,” Lim said.

There are six cement producers in Malaysia, namely YTL Cement Bhd, Tasek Corp Bhd, Cement Industries of Malaysia Bhd, Lafarge, CMS Cement Sdn Bhd, and Holcim (M) Sdn Bhd.

Only Sarawak-based CMS Cement has confirmed it would keep prices at the current level.

Lim said the price of other essential building materials such as sand and aggregate had also increased.

“The price of sand is now between RM40 and RM43 per cu yard, depending on the grade, compared to RM38-RM40 earlier this year.

“The price of aggregates is now at RM21 per tonne, compared to RM20 per tonne earlier this year,” he said.

House prices on the island are expected to rise by 10%, while in Seberang Prai, housing prices are expected rise by 5%, following the hike in cement price.

Kuala Lumpur-based developers such as Mah Sing Group Bhd and SP Setia Bhd with projects in Penang will continue to absorb the cost of the cement price increase.

Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi said the company was now revising the selling prices of its new projects upwards, due to the hike in cement price.

“There will be at least a 10% hike in the selling price of properties on the island.

“A hike in cement price means the price of all cement-related products such as concrete and bricks will rise. Construction cost will go up by between 15% and 20%.

“We expect the rest of the cement manufacturers in the country to adjust the price of cement upwards in the next one to two months,” he said.

In addition to the rise in cement prices, the cost of labour and transportation charges have also increased this year.

Tambun Indah Land Bhd managing director K.S. Teh said the cost of labour had increased to RM45 per day this year, compared to RM35 a year ago.

Transportation charges for sand have increased to RM450 per truck load this year from RM400 a year ago.

“There is also a labour shortage, as many Indonesian workers have gone back to Indonesia, which is booming currently.

“The selling price of properties will be impacted by the hike in raw materials and labour costs.

“However, Tambun Indah will absorb the increase in the price of raw materials until year-end.

“We will revise our pricing next year,” he added.

Teh said the selling price of properties on the island would increase more because of the additional transportation charges to ferry the raw materials to the island.

“This is why the increase in property prices on the island will be around 10%, compared to about 5% in Seberang Prai,” he said.

Tambun Indah will be launching next month the Straits Garden@Jelutong on the island, the Pearl Residence@Pearl City and Pearl Indah@Pearl City projects in Simpang Ampat.

The Straits Garden is a high-rise project comprising 183 condominiums priced from RM688,000 onwards, while the Pearl Residence@Pearl City and Pearl Indah@Pearl City schemes comprise landed properties priced between RM353,000 and RM508,000.

Mah Sing managing director and chief executive Tan Sri Leong Hoy Kum said the cement price hike would have less than a 1% impact on construction cost.

“Most of our projects have been tendered out and the construction costs are already locked in,” he added.

SP Setia property (north) general manager Khoo Teck Chong said the group would absorb this impact for now to be competitive.

”If other raw material prices such as bricks, rebar and tiles were to increase drastically, we may then have to review and adjust our property selling price accordingly,” Khoo added.

Meanwhile, the Malaysian Competition Commission (MyCC) chief executive officer Shila Dorai Raj had said the price hike by cement manufacturers did not at this juncture warrant a formal investigation.

“Price increases are by themselves not anti-competitive in nature. However, if there is evidence of collusion among the competitors to increase prices, this would be of concern to MyCC and may merit an investigation,” she said. - By David Tan (The Star)


August 17, 2012 at 7:01 PMKHC

Lanciau la.....Cement 1 bag go up RM1.00, house price go up by RM50,0000.00. Where is the fucking logic? They are only interested in making more money from other people misery....

August 17, 2012 at 9:32 PMcondomana

Hock Chuan, mai tu lan lah. At least the developers are not saying they need to increase house price because corn price went up as the indo workers eat cornflakes for breakfast....Cheers!!

August 18, 2012 at 5:34 PMHo

ka ni neh... everything also increase but when salary will increase? Want to make house not affordable is it?

August 18, 2012 at 5:36 PMHo

Its a serious issue and the middle class will no longer able to upgrade their lifestyle accordingly. Every year got reason to increase the price of housing... no cheers man!

August 19, 2012 at 12:54 PMKevin long as they are people willing to buy...means got demand... i think the developer can give any simple reason...

so is it because the cement used in penang special, go up 10% price but other states no need to increase price? why only specifically say Penang house price increase 10% and not other states?

maybe we can go ask developer buy cement from kedah or perlis huh?

August 19, 2012 at 8:19 PMHo

Cleaver Kevin... Penang middle class if tak boleh tahan, should have blackout from buying new house for 1 year, see whether next time Penang sand price increase or not!?

August 19, 2012 at 11:38 PMUnknown

our next generation no need buy house already, due to house price keep brainless increasing

August 20, 2012 at 12:39 AMhedges

That's y ppl now buying hse like daylights robbery...scared their next generation no hse to stay....Kia c ko kiasu ko Kia Bo wui tua.

August 20, 2012 at 9:40 AMyouthgen

Coming GE13 dont vote locket and vote for Bee Ean for sure housing price will coming down like in year before 2008, ppl see pg got hope after change administration. If vote for bee ean no future n if vote for locket house price keep increase. So how you guy make ur decision lol.

August 20, 2012 at 2:57 PMUnknown

Cartoon comment...

Property price goes up is due to supply & demand. Demand is high due to development, and development is a result of stability.

What has that got to do with "locket"?

If you want property price that never go up, go to places that take ages to develop lar. Places like Batu Kurau, Bagan Serai, Tasek Glugor, or places that we've hardly heard before.

Please be reasonable lar, Cartoon. Don't expect to get the best but cheap, where to get? And don't try to politicise unreasonably.

August 20, 2012 at 3:08 PMtyh

Whether you like it or not properties in Penang will get more and more expensive regardless who takes control of the federal/state government. I always believed everyone has a choice. If you want something you got to work harder for it. We are always in a race. If you don't catch up in the race you will either be stagnant or left behind. Everyone has a choice and when the person is ahead in the race you don't see them complaint prpoerties in Penang are not affordable. When you are left behind, then you will hear that person complaining it is not affordable. Average household income in Malaysia according to recent survey is 5k+ per month. Take this as a benchmark n see where you are. If you falls below that it means you got to think how to push yourself harder to reach the middle income household. If you are somewhere in the middle now then you can think of getting to the higher income group to be able to afford higher end property. That is why we have low, low medium,apartment,condominium,super condo n luxury condo to cater to different group of income earners. Majority of people complaint that they could not afford Penang property is because they often want a property that is higher than their range of affordability as mentioned above. Just some sharing as I used to come from low income group but has made a significant change in life/career to be where I am today.

August 20, 2012 at 9:30 PMjeremy tan

I agree with you. Everybody wants to live the Penang Island Dream. Why not the Seberang Prai Dream or Butterworth Dream? Still within the affordability range.

August 21, 2012 at 10:01 AMyouthgen

Cartoon comments....

Small kid still long way to mature, emmm.... must take time to grow up. Take it easy... time will prove it.

August 21, 2012 at 10:16 AMtwyeow88

tyh, you are absolutely right. also the world is so connected now that we have to compete with people from all over the world even for properties here in penang. thanks but no thanks to globalisation. i agree work smart or work hard is the only way to go. and be thrifty along the journey.

August 21, 2012 at 10:18 AMyouthgen


Too long staying on island, stuck there or never had a chance abroad???

Don't be smart. You just a kindergarten kid only.

August 21, 2012 at 11:19 AMStanley

When many people default in paying, the price will definitely go down due to auctions. Banks also will be more carefull in lending. Worst still, some banks will go bankrupt or have to merge with the big banks. By then, all developers will either start lowering the price or build smaller units in order to make profits. All companies, banks, developers and councils or even our governments suddenly realize that it is almost impossible to buy a RM500K house when the combine salaries of husband and wife is around 5K to 6K. Any calamity or economy downturn will force companies to retrench their staff or any accidents will spell troubles to them and the chains. The odds of it happening is high. The bubble will one day burst like in America when the price drop up to 40%.

August 21, 2012 at 5:50 PMHo

Agree Stanley... I know what the people here means by working hard and smart so that can afford to buy house. I just feel the price increase is abnormal...

August 22, 2012 at 10:49 PMjz

i really love this site, especially the comment column. I was here when begin searching for house and I end up buying low cost house even when I am in middle class group. It has been three month since we move in into our walk up apartment. It is noise since the apartment not super multistory high; acceptable. The plus side is if I lost jobs tomorrow, I still have roof above our family because we can still affordable. Mean time we enjoy fine dinner with family when ever can because we aren't paying high monthly installment. Oh, about house floor size; we manage to setup small garden and our young kids aren't complaining either. Moving from huge condo to small apartment did bothered me at first, common'on its a downgrade not an upgrade! It about how much we have and not how much we can borrow; made our decisions.

August 23, 2012 at 2:20 PMalexenjoylive

Penang property bubble is definitely gonna burst, The Torch Light 1, 2, 3, Golden Rectangle, Winter place, Gurney Paliagone. All buyers now waiting for subsales.

August 23, 2012 at 2:48 PMkoktiong

Penang Island properties are high. Do you also know that Hatyai city (urban), Medan (urban) are even higher than our Island. You also look at Manila center, the people there cant even buy a studio unit to stay.

In Malaysia, propertyies is an open market. Land here are very expensive and difficult to get. Many people waiting to buy during "bubble", do you all know "when" will the bubble come ? If you are not greedy, buy one or two for your own stay is good enough.

August 23, 2012 at 3:02 PMKevin

now I wonder who is telling the truth?

One side says, cement price, no impact!

the other side say, cement price go up, housing price also go up!

August 27, 2012 at 9:59 AMEvalulu

It depends on the developer whether want to absorb or not wan mah... compared to their profit margin, this increase should be kacang putih only.

September 4, 2012 at 10:40 PMcondomana

"...... although the regulators try not to intervene in the market, some intervention is needed if the market outcome contradicts public interest."....An aptly made statement by Singapore Minister of National Development Mr Khaw Boon Wan (a Penang Chung Ling boy) on Spore property trend. Striking a balance between free market and public interest is important in today's open economy.

December 2, 2012 at 10:59 AMNano888

The landed property price is way sky high lately. Is this going to increase higher? Been delaying in buying but unable to catch up with the price increase. Guess háček to buy now or else worse?

December 2, 2012 at 9:08 PMjeff

daylight robbery! just like when sugar price increase, kopi or teh also increase..