Cement prices will impact on house buying

Cement prices will impact on house buying
Published: 26 December 2007

Two Malaysian housing organisations once again stated their objection to the implementation of an Automated Pricing Mechanism (APM) for cement scheduled for January 1 next year.

Cement is a vital component in the building and construction industry, and any hike in pricing would inevitably jeorpardise the industry, the Real Estate Housing Developers Association (REHDA) and Master Builders Association Malaysia (MBAM) said in a joint statement here Wednesday.

"The ever-increasing cost of other building components is already causing a rise in property price, hence, house buyers will be burdened further with the implementation of APM," they said.

They said the cost-plus for cement is unjustified and the move would only benefit the manufacturers.

Upon the introduction of APM, cement price would be revised at each quarterly review period and whilst the APM is to be revised regularly, the industry believes that there is a high tendency that pricing will be revised upwards instead of downwards, the statement said.

On rumours of prices going up in January, REHDA president Ng Seing Liong and MBAM president Patrick Wong said: "We hope the rumours on price increase is not true as any attempt to further increase the price of cement will definitely affect project costs. "This will result in upward revision of prices for new housing and property launches."

Both organizations, whose members are the main cement end users, feel that the APM mechanism is not justifiable and not in the interest of the industry and property buyers.