Property prices may rise 25% on steel bar shortage
Posted on | April 10, 2007
By THE STAR
PENANG: Property prices may rise by about 25% this year if the shortage of steel bars in the country continues.
Currently, due to the shortage, the price of steel bars per tonne is about 40% more than the RM1,600 ceiling price set by the government.
Penang Master Builders’ & Material Dealers’ Association executive advisor Lim Hun Swee said the high cost of steel bars would eventually be passed down to house buyers.
“Steel bar is a controlled item. The only way to raise its price is to impose ‘surcharges’.
“These ‘surcharges’ are justified in the form of transportation, handling and special requirement costs,” he told StarBiz.
Lim said the present shortage problem in the country was caused by exports as steel producers could get a better price for their products overseas.
To tackle the problem, Lim said the government should consider stopping temporarily the export of steel bars and set a new ceiling price.
“A new ceiling price will deter producers from imposing ‘surcharges’ and give them the incentive to sell to the local market,” he added.
Last week, major builders’ associations in the country also urged the government to curb what they said were “runaway steel prices”.
They called for the removal of price controls on steel bars and cement and to allow the free market to determine their prices.
They also said that recurring shortages and price fluctuations could interrupt construction schedules of projects under the Ninth Malaysia Plan, especially for low- and medium-cost housing.
The associations that made the call included the Master Builders Association Malaysia, Persatuan Kontraktor Melayu Malaysia, Real Estate and Housing Developers’ Association and Persatuan Kontraktor India Malaysia.
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