Kota Kinabalu property market, shortages soon?

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How many foreign workers would you find in a construction site in Sabah today? Well, except for the site supervisors, I think nearly everyone is a foreign worker. Of course, not just true for Sabah but also Peninsular Malaysia too. The problem with over-reliant is that if some unforeseen circumstances do happen, it will affect the construction and thus the actual property development’s completion date itself. According to a local daily report, it is said that 95% of the construction sector in Sabah are relying on foreign labour. Yes, it’s 95%. Needless to say, if these foreign labourers suddenly disappeared from the construction sites majority of all property developments would be affected. Even today, it is already facing labour shortages, especially because developments bought less than 3 years ago are in progress of being built and any delay comes with late penalties.

According to the Sabah Housing and Real Estate Developers Association (SHAREDA)’s President, Datuk Francis Goh, property sector is a very important contributor to Sabahs economy. Thus, the industry needs a sufficient and consistent supply of workers. This will help in all the projects which is being built whether they are government related ones or private ones. As usual, locals are not interested in these jobs which are deemed to be tough and low level. Thus, the number of foreign workers continue to increase with the booming property sector for the past many years. In fact, another important factor why these numbers would reduce is also because of the release of the Royal Commission of Inquiry last month. This will definitely see more actions being taken on the undocumented migrants in the state and this will indirectly affect the number of workers available in the construction sector. Many more will be deported once caught.

Personally, I think the developers just have to do things the correct way. If they hire illegals to save on documentation fees, in the long term it would come back to haunt them. If however, everyone follows the usual rules and regulations, I think the state government would be clearer on what to help and how to help. Currently, I sense a disconnect and I seriously do not think anyone can say for sure how many construction workers are actually needed. Once this is not transparent, there’s no way that actions can be taken. No, I do not think the locals would take up the job even if they pay slightly higher because it’s the perception too. Not many Malaysians would want to slog under the sun together with a majority of foreign workers. Would you?

I also believe that the numbers being contributed to the Sabah economy from the property sector is huge and the state may have to do more to ensure this ‘engine’ does not stall. Do remember that once the workers leave or deported, the construction work slows and the completion dates delayed. Very soon, the risks to build becomes far higher than the expected profits and the smaller ones may just opt not to build. In the future, no one benefits from this. The industry slows, the number of output goes down and well, with the same demand, the prices would go up. I just hope that the state government and the developers are working together because the Sabah economy is at stake here, not to mention a home sweet home for majority of all Sabahans. (I am partially Sabahan too by virtue of my wife being a Sandakan, haha.)

written on 17 Dec 2014

Next suggested article: Kota Kinabalu Property, High-end on a growth cycle – Knight Frank

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