KUALA LUMPUR: The conflict in the Middle East and its consequential disruption to global energy flows have caused crude prices to increase, resulting in rising costs and other consequences but this is a “temporary deviation”, says a government official.
For the construction industry, this means input costs are rising, with steel, cement, transport fuel, and site equipment costs all under upward pressure, said Deputy Economy Minister Datuk Mohd Shahar Abdullah.
However, this should be viewed as a temporary deviation rather than a structural break, he said at the Malaysia Building and Property Summit 2026 here yesterday.
In his special address, Mohd Shahar said the World Bank had forecast overall commodity prices to rise by around 16% this year.
“Margins will be tested. It also means the public-sector project pipeline will be sequenced more tightly, with sharper prioritisation of catalytic projects that demonstrate measurable returns,” he said.
Nevertheless, he said Malaysia had successfully navigated oil shocks and global volatility before.
“Our financing conditions remain supportive, our domestic demand intact, and our investment pipeline continues to attract quality capital,” he said.
During one of the panel discussions, Rahim & Co Chestertons director real estate agency Siva Shanker said that from a commercial point of view, it was “impossible” to make any judgement call as to how things were going to look, moving forward.
“We do not know which direction this whole thing is going,” he said, referring to the ongoing global conflict.
“That whole environment is so volatile, but I worry if it is going to escalate. I think we are going to be seeing some abandoned stuff,” he said, adding that ‘’there is only so much you can absorb”.
“We could start seeing some abandoned developments...this is very scary, commercially.”
Zerin Properties chief executive Previndran Singhe said he anticipated a “strong” pullback on property launches as costs continued to remained uncertain.
Mohd Shahar, meanwhile, noted that the government’s role was to maintain macroeconomic stability and protect the conditions for the private sector to do its work.
He also also said that the affordable housing mismatch must be addressed.
As of the first quarter of 2026, Malaysia held 32,801 unsold, completed residential units, valued at RM16.37bil.
The serviced apartment segment alone accounted for nearly 19,263 of those units, with close to 60% priced between RM500,000 and RM1mil.
“The market is telling us something clear. The mismatch is not in demand. The mismatch is in what is being built versus what most Malaysians can actually afford.”
Mohd Shahar also said developers whose projects aligned with regional priorities and demonstrated clear social and environmental returns would see stronger government backing through faster approvals, infrastructure coordination, and access to financing facilities.
To a question from the floor on the energy crisis, GreenRE Sdn Bhd executive director Ashwin Thurairajah said it was “good to see” many of the larger developers playing a significant role not only in terms of promoting the ventures of environmental, social and governance (ESG), but also transforming the entire supply chain
“They have made it (ESG) a part of their standard operating procedures.”
Themed “Powering Smart & Sustainable Development in the New Geoeconomic Era,” yesterday’s summit served as a strategic platform for discussions on economic transformation, sustainable urbanisation, affordable housing, digital innovation and the future direction of Malaysia’s property ecosystem.
