Property market growth in Sarawak set to continue, riding on back of bright prospects

Monday, 24 December 2012

LABOUR-INTENSIVE: The construction sector in East Malaysia remains highly labour-intensive with labour cost constituting up to 30 per cent of construction cost. — Reuters photo

LABOUR-INTENSIVE: The construction sector in East Malaysia remains highly labour-intensive with labour cost constituting up to 30 per cent of construction cost. — Reuters photo


KUCHING: Despite multiple challenges in the property sector, growth in the real estate market is set to continue on the back of brighter long-term prospects.

“The government’s minimum wage scheme to be implemented on January 1, 2013 will have a slight impact on the cost of houses, especially in East Malaysia,” said Sarawak Housing and Real Estate Developers’ Association (Sheda) secretary general.

Sim pointed out that the construction sector in Sabah and Sarawak still employed a lot of physical labour which resulted in labour cost constituting up to approximately 30 per cent of construction cost.

While the secretary general believed that this would cause a slight adjustment in the selling prices of properties, the overall health of the sector remained intact with schemes such as the Sarawak Corridor of Renewable Energy (SCORE) underway.

Rising costs has always been a main challenge for the sector. Apart from labour costs, land cost has increased significantly over the past two years attributable to the increasing scarcity of land in the urban areas.

However, Sim believed that income would rise following the implementation of SCORE, thereby boosting the demand for residential, commercial and industrial property.

The government initiative was expected to boost real estate development outside the main urban areas, focusing on new townships such as Tanjung Manis, Mukah and Samalaju where the impact of SCORE would be felt the most.

Looking northward to Miri, CH Williams Talhar Wong & Yeo Sdn Bhd (WTWY) managing director, Robert Ting commented that, “The SCORE projects in Samalaju Industrial Area will have a spillover impact on the Miri property market.

“The Miri property sector has been progressing well in year 2012, with property developments ongoing and prices for residential and commercial properties moving steadily upwards. We can observe this from the many new launchings of projects, as well as the sales performance.”

He believed that the Miri airport served as a good connection channel for overseas travellers and foreigners travelling to Bintulu, noting that this would have a significant impact on the property market there as well.

In the capital city of Kuching, the Isthmus project was expected to pave the way for further growth. With the implementation of this large-scale long term project, the focus would be shifted from the city’s traditional waterfront centre.

This was believed to be a timely shift, as prices in Kuching city centre had been soaring due to high demand and limited land. As a result, developers are more inclined to build high-rise properties and mixed development to derive more value from the expensive land parcels.