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Cheaper steel cuts property prices
01/01/2009 NST

The price of steel has dropped to RM1,900 per tonne from RM4,100 and has contributed to falling property prices.

KUALA LUMPUR: Prices of houses and properties have fallen by as much as 15 per cent due to the economic slowdown, said Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Ng Seing Liong.

He added that the drop in prices of steel, an important component in property development, was also a contributing factor.

Because of those factors, Rehda members have no choice but to lower the prices of properties as demand has also dropped, said Ng

Ng said buyers have also cut down on expenditure as they face the global economic slowdown expected to hit hard this year, and those in the property and housing industry will be particularly affected.

He added that the value of steel that dropped to RM1,900 per tonne from RM4,100 has contributed to the deteriorating prices of houses and properties.

"The situation is now at its worst. However, the declining prices of properties depend on the location and demand as there are places that are unaffected.

"In May, building costs rose to 30 per cent due to the price hike in building materials and when the prices dropped, it also brought down costs, which enabled developers to continue their projects. It is only the cost of transportation that is still high," he said.

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