KUCHING: Sarawak developers are facing rising building costs as the Iran conflict pushes up oil-linked inputs.
SHEDA adviser, Datuk Sim Kiang Chiok, said the Sarawak property sector welcomes the RM876.2-million Special Aid Package unveiled recently by the Premier.
He said measures including the enhanced SKAS payout, the 25 per cent electricity discount, and the 50 per cent rental reduction for small businesses showed a caring and targeted approach to shielding household budgets during the current period of geopolitical turmoil.
While these interventions provided a critical buffer against the rising cost of living, he stressed that the conflict in Iran was already generating tangible cost pressure on development.
“Developers were seeing broader pressure as the surge in global oil prices had directly inflated the cost of diesel and premix.
“As a result, manufacturing and logistics costs for building materials transported from West Malaysia to Sarawak were climbing sharply,” he told Sarawak Tribune.
He added that the state was fortunate that Sarawak’s control over industrial electricity tariffs remained stable, insulating local production from the full force of global energy volatility.
On housing demand, Sim said the state’s assistance was vital in preventing a deterioration in household income and living standards.
However, he said the effect on the property market would likely be mixed.
“While the aid supported overall confidence, housing demand could face a temporary slowdown as potential purchasers adopted a wait-and-see approach while monitoring how the war affected domestic inflation and future interest rate trajectories.”
If external pressures persisted, he said, the biggest concern for Sarawak’s housing industry would be a combination of factors affecting affordability.
“The primary risk was the potential deterioration of income through job losses or reduced earnings, coupled with rising consumer prices,” he said.
He said this dual pressure would directly erode the purchasing power needed for homeownership.
Sim also said he was encouraged that the Premier had noted rising construction costs and would act once more comprehensive data became available.
“This prudent, evidence-based monitoring would help protect Sarawak’s growth momentum, adding that the relevant industries stood ready to support the state government in navigating the current headwinds.”
