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21st July, 2008
KOTA KINABALU: Developers are now in the process of conducting a study to analyse the possibility of doing away the unnecessary specifications to their future building designs.
The reduction is needed to save cost from using unnecessary materials in view of the escalating prices caused by the global fuel price hike in the market.
Leading local developer the W Group when met believed that the cost cutting measure is unavoidable and this is the best option they could do for now to enable developers to stay afloat in the building industry which is getting tougher every day.
The W Group senior group procurement manager Christopher Chin said the study is ongoing, among others it will try to lower down the height of the ceiling from the standard of 10 feet to perhaps 81/2 feet in future.
“Beside that, the developers will also look into the possibility of reducing the size of the parking porch,” he said adding that the ongoing study will be adopted by future apartment project.
“Through the reduction, developers can save between 10-15% of its cost without compromising its quality because we are trying to use steel bars and concrete by cutting down the use of cement,” he explained.
All the developers believed that this is the way forward for them to sustain in the building industry, he said adding that Kota Kinabalu City Hall (KKCH) engineer is in favour of the proposal that they have highlighted.
“This measure is necessary for the developers to maintain a reasonable selling price for its property otherwise the progress of the building industry will be stagnant if the selling price is increased because it is not affordable for the people to buy,” he said.
The property selling price is expected to remain as it is for now and this will definitely hurt our profit margin, he said adding that developers will play the role of cost saving.
The unstable prices in the building materials will also discourage the developers from launching new projects because they have to sacrifice a lot of their profit for the house buyers, he said.
On the latest development of the steel bar price in the market, he said it is understood that by early next month it will be increased by up to RM5,000 per tonnes from the current RM4,500 per tonnes.
On the move taken by the Sabah Housing and Real Estate Developers Association (SHAREDA) to outsource building material from overseas, he said the prices in overseas is actually fluctuate all the time and whether the price is comparable with the local price or not is another question.
“We buy most of our stocks from West Malaysia manufacturers through local suppliers because steel bars are a controlled item,” he said.
“Basically, it is a good ideal to outsource from overseas but we must make sure that the prices are reasonable, the quality is acceptable and the supply is consistent otherwise it will upset our project,” he said.
The price of cement had also gone up few times in the last few months from RM281 per tonnes to RM328 per tonnes now after the diesel price hike, he said.
The cement are bought in bulk from Cement Industries Sabah (CIS) and it became more expensive than before after they opened the market because of the money exchange rate, he said.
To date, the W Group are undertaking three projects-Cyber City 1 which was launched two years ago, University Apartment 2 and University Condo Apartment-both launched last year.
The demand for property in the market now are those priced between RM140,000 to RM160,000 per units to cater for the middle income group, he said adding that its three projects are expected to be ready according to schedule despite the crisis in the building materials.
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