Petrol price rise and migrant raids will increase house prices by up to 10%

September 5th, 2013 Leave a comment

People looking to own a house any time soon will have to pay at least 10% more for their dream home, according to developers.

They said the increase was due to the double whammy that has hit the construction industry – higher costs of building materials resulting from the 20 sen rise in the price of RON95 petrol and diesel and absenteeism among foreign workers because of the nationwide crackdown on illegal immigrants.

Real Estate and Housing Developers Association of Malaysia president Datuk Seri Michael Yam Kong Choy said the failure of foreigners to turn up for work was causing delays, thus adding to costs which contractors were certain to push to consumers.

He added: “The raids on construction sites have frightened even legitimate migrant workers who are staying away.

“This also happened in past raids, Legitimate migrant workers simply did not turn up for work or delayed their return from their country until the storm blew over.

“Because of the shrinking supply of workers, developers have to pay more for labour to meet contractual deadlines, failing which they will be penalised.”

Developers are bound by the Sales and Purchase Agreement and will have to pay compensation to buyers for late delivery, Yam said, adding that contracts in the private sector were awarded with no provisions for price adjustments.

While acknowledging the need to flush out illegal immigrants, he said any reduction in the number of workers would hurt developers.

On the fuel price hike, Yam said it affected the supply chain of the construction industry, involving more than 100 types of business.

Master Builders Association of Malaysia president Matthew Tee said members were complaining that their legal workers whose documents were being processed were staying away for fear of being arrested.

“Our understanding is that all foreign workers will be detained unless they can prove that they have proper documentation,” he said.

“This can be difficult as their documents may still be with their employer or immigration pending the affixing visa of stickers by the authorities.”

He added that there had been cases in the past of legal workers being detained for up to 14 days.

Tee hoped that there would be no recurrence of such instances, and warned against a repeat of the situation in 2002 when the construction industry was brought to a standstill due to a shortage of workers.

In George Town, the Penang Master Builders and Building Materials Dealers Association says it expected construction costs to rise by 3% to 5%.

Association president Datuk Lim Kai Seng said the cost of transportation was likely to rise 10% to 20%, and the prices of sand and cement by between 5% and 10%.

He said that cement now cost RM17.50 per 50kg while sand sold for RM70 per cubic metre.

Source: StarProperty.my

Categories: Property News Tags:
  1. hi
    September 5th, 2013 at 13:29 | #1

    This will affect property market of penang.. Even more expensive the price now

  2. Bryant
    September 5th, 2013 at 13:32 | #2

    So we got the so called cheaper price for properties many years back due to illegal immigrants contribution?

  3. HUAT
    September 5th, 2013 at 13:37 | #3

    Wow.. Prices going up up and UP!
    Quickly grab remaining units on sale now. Future projects will be 10% higher.
    Wait, maybe now the prices already include the 20cents oil increase? Maybe developer consider worst case… “if 50cents oil increase next 3yrs”

  4. hi
    September 5th, 2013 at 14:23 | #4

    Is this going to impact subsale market?? Direct impact..

  5. Bryant
    September 5th, 2013 at 15:17 | #5

    I think the subsale market pricing will increase according to nearby new launch if any as a new benchmark (which is 10% higher soon)…. projects like OI or TS which have multiple phase of launches may see this 10% difference along the way…

  6. joeyoung
    September 5th, 2013 at 15:29 | #6

    Oh. Pity those still waiting for price to go down to buy their dream home.

  7. HUAT
    September 5th, 2013 at 15:49 | #7

    These people dont hope for prices to drop only. They hope economy come crashing down as well. Only that way they could buy a very good dream property on their favourable location at 50% or more discounted rate. Its like on/off button.

    “Today i wish to buy a landed.. Switch on.. Wala!! Economy down, RM weakens, the citizens goes out of job, foreign investment back out from Msia, riots… Oh great, instead of 1mil now RM350k.
    Good, transaction close and the hse is mine.

    Switch the button off. Ooops, why dont the economy bck to normal? What happen?”

    Very irresponsible negative thoughs if you ask me.
    Prices up is not good same goes to prices down. Dont be selfish with your desire. Instead work hard to achieve it if you want it so much. Many ways to do it. Good ways. Legitimate ways.

  8. hi
    September 5th, 2013 at 16:01 | #8

    I think all the area around penang..expecially to those tanjung bunga..gurney drive..tanjung tokong..and Georgetown area will experience of price increase for landed property and condominium soon.

  9. lol
    September 5th, 2013 at 17:26 | #9

    GST will be announced very soon in this coming 2014 budget. Make it a triple whammy!

    1) Foreign workers crackdown
    2) More expensive petrol and diesel. They will certainly increase it again in the next 2 years.
    3) GST of at least 5% for it to be meaningful

  10. condomana
    September 5th, 2013 at 17:43 | #10

    It is surely reasonable for an end product to increase in price when the cost of producing it is increased. In terms of properties, that same principal should apply too, provided 2 things are being taken care of; (1) speculation (2) cartelism.

    To reduce speculation, anti-speculation policies have to be put in place, whether it’s in the form of RPGT, stamp duty, vacant property tax etc, as long as it discourages speculation and makes the cost of it not worth the while.

    As for cartelism, the gov has to make sure that non-profit driven good quality (as good as private condos) gov housing is adequately supplied into the market not only for the low income group, but for the mid income group as well. This will prevent profiteering by developers as well as land owners, sometimes you really can’t tell between the 2…;)

    As long as these 2 major elements are taken out from the house price formula, we should have no problem, even if property price goes up….:)

  11. Numbers Man
    September 5th, 2013 at 18:47 | #11

    Petrol used in construction represents less then 1% of total construction cost… so 10% of 1% is only 0.1% so if anything a RM500 per sq ft condo should go up to RM0.5 per sq ft… yet a number of developers have already announced that their next phase will go up from RM500 to RM600 per sq ft… that’s a 20% rise…

    Who is cheating who?????

  12. islander_ori
    September 5th, 2013 at 19:01 | #12

    @Numbers Man
    I think you forgot the transportation cost for those raw material…

  13. Rich Man
    September 5th, 2013 at 19:51 | #13


    lol :
    GST will be announced very soon in this coming 2014 budget. Make it a triple whammy!
    1) Foreign workers crackdown
    2) More expensive petrol and diesel. They will certainly increase it again in the next 2 years.
    3) GST of at least 5% for it to be meaningful

    So now they add salt into the wounds… people would have no money to buy property. Keep jacking up the price for self delight, but no buyer la. It’s time to seat back, relax, and plan my next move. Cash is king!!

  14. HUAT
    September 5th, 2013 at 20:07 | #14

    Cash (RM) depreciating la..

  15. ahmad
    September 5th, 2013 at 20:25 | #15

    true…cash is only drecreasing in value….only propertu will appreciate and up the value. keeping cash is only ‘shock’ sendiri..@HUAT

  16. Rich Man
    September 5th, 2013 at 21:06 | #16

    ahmad :
    true…cash is only drecreasing in value….only propertu will appreciate and up the value. keeping cash is only ‘shock’ sendiri..@HUAT

    Cash is a must… and knowledge is a must, there’s time to go in, and time to get out. If you do not know these basics, better stay out, or you will get burnt sooner or later.

    The signs are clear… local connot afford, and foreigners think Australia property is cheaper now. I have stopped buying since 2 years ago.

  17. Angel
    September 5th, 2013 at 22:02 | #17

    Now property price in penang more and more high..10% is very huge impact of increasing already. Waiting Oct 25 budget announce don’t know what is going to happen to property market..again..I strongly believe..property price by end of this year have a strong path in increasing in price..might be even more than 10%.Due to multiple of root cause..and ringgit malaysia devalued also is a root cause. What a disaster for those want to buy their house next year..

  18. Roti Boy
    September 5th, 2013 at 23:15 | #18

    Dear all,

    These are purely my assumption.

    Datuk Lee and his team is now very worry of the sluggish sales for the past few months. When gov announce the fuel hike, they exaggerate the whole story and implant fear to the rakyat. Hoping all will start to rush and grab one before it hike another 10%.

    Does it works? Sure it works. Datuk is just doing his job to stimulate the market.

  19. james
    September 5th, 2013 at 23:34 | #19

    @Rich Man

    At what point will you start to buy property again ? Is it when property drop 20% ? 30% ?
    Honestly speaking , i believe the property might get stagnant and might progressively drop…but be realistic it won’t to extend 50% or 70% drop…

  20. SK
    September 5th, 2013 at 23:51 | #20

    Petrol price rise and migrant raids will increase house prices by up to 10% ???

  21. Micheal
    September 5th, 2013 at 23:55 | #21

    Again another one sided story….

    Banks, developers, politician to raw material suppliers were cahoots, working hand in hand to push the property prices up.
    Now its getting worse, the media also sing along with this REHDA people.

    If you are smart enuff, just ignore these “empty barrel making noise”. Hold your position. Time will tell.

    The entrepreneurs in KL already started to feel the heat (Slowdown) since last quarter of 2012. Things have not pick up since (even after election).
    Equities market are terribly shaky & uncertain with no fresh lead.
    Fitch have downgraded Malaysia and our currency have depreciated.
    Most properties prices are at sky-high prices…..

    SO GUYS and GALS, you get the sign here…. see it.

    Don’t get me wrong, I owned two landed properties, and why should I write negatives news.
    No….it is because when you write something, let that something is substantiate with fact and logic.

  22. citizen
    September 6th, 2013 at 00:27 | #22

    Agree with you … we should not be so gullible as to be easily fooled n manipulated by these unscrupulous vultures with obviously vested interest

  23. Chocolate
    September 6th, 2013 at 09:09 | #23

    @Roti Boy

    Why relate LCW with property Pg? I can not see his company LCW Bina built any house here, or i miss something?

  24. hi
    September 6th, 2013 at 13:30 | #24

    In conclusion..property price in penang island will going up another stage of price increasing soon.

  25. Benny
    September 7th, 2013 at 12:45 | #25

    Michael, we dont invest in property to gauge the current situation. I have no doubt the outlook now is less than rosy. We are looking at 5-6 years ahead. You can keep on holding and we can keep on building our profile… it`s a free world right… :) cheers

  26. Benny
    September 7th, 2013 at 12:46 | #26

    And lets come back here in 5 years and we’ll see who is the joker…

  27. Owner
    September 7th, 2013 at 16:10 | #27

    5 Years later…Sure all the condo condo is 1M above..Not sure who is going to buy the house already.

  28. u
    September 7th, 2013 at 22:29 | #28

    5Year later..Property market sure crash!

  29. condomana
    September 8th, 2013 at 16:32 | #29

    5 years later ah, if the state still cannot deliver affordable housing to the middle class, maybe it’s time to have a change of party….:) ..what’s the use of a gov that cannot build good public transport, good affordable housing for the mass middle class?…:)

  30. Star
    September 8th, 2013 at 21:39 | #30

    ALOR STAR: The Real Estate and Housing Developers Association should not have announced that the price of houses would increase by up to 10% before discussing with the Urban Well-being, Housing and Local Government Ministry.

    Its minister Datuk Abdul Rahman Dahlan said he was disappointed with the announcement of the hike, purportedly due to the decrease in petrol and diesel subsidies.

    “To me, this is an irresponsible statement. We have our own formula and we feel that the reduction in oil subsidy by 20 sen per litre cannot be translated into a house price increase of up to 10%.

    Abdul Rahman was commenting on the reported statement by Rehda president Michael Yam Kong Choy on Thursday that the fuel price increase of 20 sen per litre was expected to contribute to price increase of houses by up to 10%.

  31. Expert
    September 8th, 2013 at 21:59 | #31

    Then what do you think suppose to be?

  32. JR
    September 8th, 2013 at 22:12 | #32

    Greedy developers with no principles will say anything ….. shame shame shame !

  33. Expert
    September 8th, 2013 at 22:17 | #33


    Developer and speculator causing all property in penang up and up the price..Pity to those fresh graduate…

  34. Beware
    September 8th, 2013 at 22:33 | #34

    Up up up ……. Boo o o ooom ! CRASH !!!

  35. SG
    September 9th, 2013 at 08:55 | #35

    If the increase in petrol price does not contribute to increase in house price then wait and see if your bowl of mee rebus or wanton mee stays at that level sooner or later? Common sense will tell. I don’t blame the developers.

  36. joyce
    September 9th, 2013 at 10:17 | #36

    He make announcement suka hati dia, need to anaysis first before do any price increase. His statement caused 10% price incresed next day after announcement. He is another greedy.

  37. cincin
    September 9th, 2013 at 10:20 | #37

    Do u think this guy will make immediate statement if the fuel price reduce 20cent. For sure he will make dont know.

  38. Patrickhcm
    September 9th, 2013 at 10:31 | #38

    agree with you…i can see a lots of hawker food seller already increase the price by 10 or 20 sen in penang

  39. Reggie
    September 9th, 2013 at 11:01 | #39

    Of course the increase in petrol price will contribute to increase in construction cost and hence house prices to a certain extent, but 10% increase in house price (due to 10% increase in petrol price, meaning a linear relationship between these 2 elements) is simply absurd and defies common sense. This is akin to mee sellers hiking their noodle prices by 20 sen due to increase in price of petrol per lit or flour per kg by 20 sen. This is called exploiting the situation.

    Absenteeism among construction workers should be of little issue, if not none, in the 1st place, because if they are employing legal migrant workers right from the beginning (which I’m sure they do) and have the necessary documents in place, there is nothing to fear and the employers can easily protect their employees even if there is a raid. Unless, they are implying…… *ahem*……

  40. HUAT
    September 9th, 2013 at 13:08 | #40

    He added: “The raids on construction sites have frightened even legitimate migrant workers who are staying away.”

    Wonder why legitimate worker also afraid? Are the authorities treating them cruely or unfair because they are bangla? If yes, then the authorities are to be blamed for the increase in property prices as well. Their actions causes buyers to pay additional %.

  41. WTH
    September 9th, 2013 at 15:02 | #41

    PappaRich in Straits Quay has temporary closed due to the recent operation about illegal foreign workers.

    There’s a notice on PappaRich Straits Quay saying that its legal foreign workers have left because of worrying to get involved into this operation. PappaRich is hiring new staffs and will reopen soon.
    Source: Go To Penang

    Even Restaurant also facing worker shortage issue. Solution: pay more to get more workers. Lastly the cost will go to consumers.

  42. ursula khoo
    September 9th, 2013 at 15:16 | #42

    Nucky makes a peace offering to Joe Masseria; Federal Agent Warren Knox arrives in Atlantic City; Gillian seeks custody of her grandson; Eli’s son turns to Nucky for advice; Al Capone plans to expand his Chicago business.

    Boardwalk Empire Season 4, Episode 1 – New York Sour
    Air date: Sep 8, 2013
    Genre: Crime, Drama

  43. hunter
    September 10th, 2013 at 21:10 | #43

    @ursula khoo
    are you crazy?

  44. lol
    September 10th, 2013 at 22:34 | #44

    My brezza has spoken haha.

  45. condomana
    September 10th, 2013 at 22:43 | #45

    What do u mean? Brezza is the best condo is tanjung tokong..

  46. Economic Crisis
    September 13th, 2013 at 22:49 | #46

    The KL Property Index has fallen 17% since May… For those of you who are ignorant enough to believe property prices only ever go up let me explain to you what this means… This means that the market is selling off property stocks as they correctly believe that the development companies are going to have negative growth… which means they will struggle to sell all those over priced developments… this will translate into the property market when all those speculators who tried to make money out of thin air realise no one want to buy from them on the sub sale market… I smell a 30-40 % correction coming (lips licking)…

  1. May 22nd, 2017 at 01:27 | #1
(You can also Login/Register to submit your comment using unique ID)

Comment Guidelines
  • Avoid political discussion.
  • Comments with inappropriate wordings or personal attack may be moderated or deleted.
  • Developer must register before comment. All anonymous comments claimed to be from developer without registration will be deleted.
  • All advertisement in the comment will be deleted. Please contact us for advertising details.

To advertise your property in this page under "Related Properties for Sale/Rent":
 1. Submit your property at PenangPropertySale.com, it's FREE!
 (Please do not advertise your property in the comment)