KUALA LUMPUR: Residential property prices are expected to go up this year on the back of continuous construction price hikes, says Henry Butcher Real Estate Sdn Bhd chief operating officer Tang Chee Meng.
“As far as the prices are concerned, property developers have been absorbing the increase in construction costs in the past few years.
“Costs of steel, bricks and other building materials have gone up quite significantly,” he said at a press conference in conjunction with Henry Butcher Malaysia Perspective 2025 here yesterday.
Tang added that the market has yet to be in a strong position and developers were not able to pass the cost on to house buyers.
On a brighter note, the Real Estate and Housing Developers’ Association Malaysia stated that the market had seen an improvement and it is the time for members to consider recouping some of the additional costs.
The property market had seen an overall improvement throughout the nine months of 2024 with higher transaction volume and value reported.
Moving forward, Tang pointed that the market would continue to register positive growth in 2025, underpinned by steady gross domestic product growth projections, digitalisation within the industry, major infrastructure developments as well as continuous increase in foreign and domestic direct investments.
Meanwhile, the industrial sub-sector is expected to take the lead and perform well followed by the residential sub-sector.
However, Tang stressed on a potential risk following US president Donald Trump’s comeback which may affect Malaysia’s ambitions to become a regional centre for chip design and manufacturing.
“Otherwise, we believe that the industrial sub-sector will continue to lead the way in terms of performance,” he added.
Meanwhile, Bank Negara’s move to maintain the overnight policy rate of 3% and the rise in the minimum wage are expected to augur well for the residential property market.
“The Housing and Local Government Ministry has mentioned that it would be introducing the Urban Renewal Act to be tabled this year and it has already identified 139 sites.
“So this is actually a major thing that will happen in the property market,” he pointed out.
As for the office sub-sector, Tang said the entries of several multinational companies to set up regional offices in the country are expected to contribute to the increase in demand for office space.
The retail property sub-sector, on the other hand, may experience slower growth following the increase in the cost of living as well as sales and service tax.
But this may be mitigated by the hike in the minimum wage as well as the recovery in the tourism sector.
Nonetheless, Henry Butcher noted the oversupply situation in both the office and retail sub-sectors.
The hospitality sub-sector’s outlook is promising on the back of the upcoming Asean Tourism Forum 2025 and Visit Malaysia Year 2026.
