Rehda president Datuk Ho Hon Sang says developers cautious about price hikes despite rising construction costs
PETALING JAYA: Malaysia’s residential property market is expected to see only modest price increases of between one and two percent this year, according to Real Estate and Housing Developers’ Association (Rehda) president Datuk Ho Hon Sang.
Speaking at the CEO Series 2026 pre-launch press conference today, Ho explained that while construction costs continue climbing due to operational and logistics pressures, most developers remain hesitant to significantly raise selling prices due to affordability concerns and financing considerations affecting buyer demand.
“Perhaps one to two percent is enough to cover the additional cost, but not 10 to 20 percent,” Ho stated during the media briefing, emphasising the delicate balance developers must strike between profitability and market realities.
He noted that construction costs are anticipated to increase by approximately two to three percent in 2026, but developers are unlikely to pass the full burden onto homebuyers.
“Some may adjust costs slightly depending on the product, but generally it is not easy to increase the selling price. Realistically, the price should increase as well but not necessarily, because this is business,” Ho explained as reported by New Straits Times.
Any price adjustments will remain modest and will also depend on additional costs arising from new government measures being introduced this year, he added.
Ho’s comments came in response to Prime Minister Datuk Seri Anwar Ibrahim’s statement yesterday that the government may consider relaxing import conditions if necessary to ensure construction material costs remain contained and do not burden the public.
The Prime Minister, who is also Finance Minister, said the move would be considered should price hikes by industry players continue to exert pressure on development costs and the cost of living.
Ho described the Prime Minister’s statement as an important reminder to industry players about cost management responsibilities.
“Local producers and manufacturers need to be very vigilant about what the Prime Minister said so that costs remain under control,” he said, noting that most construction materials used in Malaysian projects are sourced domestically.
Beyond raw materials, Ho highlighted that higher operating expenses continue contributing to escalating project costs. These include stricter enforcement on overloaded lorries and other compliance measures that developers must factor into their budgets.
The combination of these factors creates a challenging environment where developers must absorb increased costs while remaining competitive in a price-sensitive market.
The cautious approach to pricing reflects the current state of Malaysia’s property market, where affordability and financing accessibility remain critical factors influencing purchasing decisions.
Developers are keenly aware that aggressive price increases could dampen already moderate buyer demand, particularly as financing conditions and household incomes continue to affect homeownership rates.
The CEO Series 2026, organised by Rehda Institute, is expected to serve as a major platform for industry leaders to evaluate government policy signals and formulate more sustainable business strategies throughout the year.
According to Rehda Institute materials, the conference brings together more than 350 key senior stakeholder attendees from both government and private sectors.
During the pre-launch media session, Ho also emphasised the need for strategic investment in infrastructure and technology to maintain Malaysia’s ecosystem competitiveness.
“The ability to adapt quickly requires investment in human resource development through training and lifelong learning to ensure industry resilience in facing dynamic market trends,” he stated.
The conference will also witness the launch of the Rehda Institute Youth Initiative (RIYI), a corporate mentorship programme designed to bridge the gap between academic learning and the realities of the construction and property industries for selected university students.
The programme will be launched by Transport Minister Anthony Loke Siew Fook.
The property sector’s pricing outlook comes amid several government initiatives aimed at managing construction costs and supporting industry players.
In his 2026 New Year Address, Prime Minister Anwar announced that the government has allocated RM2.4 billion for small projects involving G1 to G4 contractors, with instructions for immediate implementation at state and district levels.
The government has also granted construction material traders the flexibility to issue consolidated e-invoices for transactions exceeding RM10,000, easing compliance requirements.
Additionally, businesses with annual revenue below RM1 million have been fully exempted from e-invoicing requirements, while companies with turnover between RM1 million and RM5 million received a one-year extension for mandatory implementation.
Ho’s forecast of one to two percent price growth suggests a stable but cautious property market in 2026, with developers prioritising sustainable business practices over aggressive expansion.
The emphasis on cost discipline, combined with government efforts to manage construction material prices, indicates a collaborative approach between the public and private sectors to maintain housing affordability while supporting industry viability.
As Malaysia’s property sector navigates these challenges, the balance between profitability, affordability, and market sustainability will remain a key focus for developers throughout the year.
