KPKT tackles rising construction costs and abandoned projects while urging local authorities to lower business premise rents nationwide.
KUALA LUMPUR: The Housing and Local Government Ministry (KPKT) has taken immediate measures to prevent a rise in delayed and abandoned housing projects, following a 30% increase in construction costs due to the global supply chain crisis.
KPKT secretary-general Datuk Dr M Noor Azman Taib said the unexpected crisis has directly affected the country’s housing industry, which involves more than 200 construction supply chains worth billions of ringgit.
“In terms of cost increases, during our engagement sessions with stakeholders, we found that costs have risen by between 20 and 40%, with an average increase of about 30%,” he said after appearing on Bernama TV’s Ruang Bicara programme at Wisma Bernama here last night.
He said that to address the issue, KPKT’s Task Force on Sick and Abandoned Private Housing Projects (TFST), established in 2023, is actively working on solutions, with 99 large-scale abandoned housing projects recorded so far.
“We have identified these sick and abandoned projects so that we can put in mitigation measures. We are working to find solutions, including finding ‘white knights’ to take over and rescue the projects, and easing the process until the Certificate of Completion and Compliance (CCC) is issued,” he said.
Noor Azman said the ministry, through the National Housing Department, is also reviewing applications from severely affected developers for extensions to project timelines, stressing that applications are assessed on a case-by-case basis to ensure that delays are caused by the current crisis, rather than poor management by developers.
Meanwhile, on efforts to support small traders, he said the ministry has called on local authorities nationwide to lower rental rates for business premises under their management, following KPKT’s tabling of the proposal at the National Economic Action Council (MTEN) meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim.
He said several states have so far taken proactive steps in response, including Kuala Lumpur, Selangor and Melaka.
“The crisis has not only affected the housing sector but also small traders. We have not set a fixed rate of reduction, instead leaving it to state local authorities to decide on the appropriate cuts to help ease the burden on traders.
“This is one of the ministry’s strategies to ease the burden of small traders, and we want other states to also join in efforts to help reduce the pressure from the crisis,” he added.
