Recent cement price hike will have minimal impact on property prices

KUALA LUMPUR: The recent hike in cement prices will only have a minimal impact on house prices, says Selangor Bumiputera Real Estate Developers Association President, Mohammad Sahar Mat Din.

He said cement usage in housing projects usually accounted for two per cent of building cost and should not necessarily affect overall house prices.

"At present, there is no apparent reason for house prices to spiral as the price of other building raw materials remain stable," he told Bernama.

He added that if the cost of a 50 kg cement bag rises by RM1, houses priced between RM200,000 and RM500,000, should only increase by less than RM5,000.

As such, Mohammad Sahar said developers should not take advantage of the situation to increase prices indiscriminately.

He also said an increase in house prices should not only depend on building raw material costs but also other factors such as land, administration and utilities cost.

Cement prices increased by RM1 to RM17.75 per 50 kg bag and by RM20 to RM340 per metric tonne bag, on Aug 1.

Meanwhile, Mohammad Sahar said the real estate sector was still developing rapidly with demand remaining encouraging for medium-cost houses.

"Medium-cost houses priced below RM500,000 were still attracting young couples and this segment would continue to remain an important contributor to the country's economic development," he added.