KUALA LUMPUR – The Local Government Development Ministry plans to offer a build-then-sell (BTS) housing delivery system rather than a sell-then-build (STB) system next year, to reduce the number of “sick” housing projects in the country.
Minister Nga Kor Ming said the ministry will work together with the Real Estate Housing Development Association (Rehda) to overcome the issue, reports Bernama.
“I will discuss with Rehda about the new business model incentives so that developers can build new houses and sell them.
“'This is so that there will be no more abandoned projects in the future, as you are only allowed to sell upon completion,” he told the media after launching the Malaysia Property Expo 2023 here today.
Nga said the ministry's special task force revived 256 projects worth RM23.37 billion as at August this year.
"We managed to save a total of 28,863 buyers and we want to make sure there are no more abandoned projects,'' he said, adding that 9,500 affordable housing units are on track to be completed under the 1Malaysia Housing Programme (PR1MA) this year.
Nga said that to date, 17 out of 24 sick housing projects under his scrutiny have been restored.
MAPEX 2023, which runs until Oct 29 at the Mid Valley Exhibition Centre, is participated by 44 exhibitors comprising developers, financial institutions and government agencies.
Meanwhile, KPKT will be joining hands with Rehda to co-organise MAPEX 2024, in a mission to further boost the country's property sector.
It was reported in April last year that former chief secretary to the government Tan Sri Mohd Sidek had chaired a special task force on the issues surrounding STB projects.
National House Buyers Association (HBA) president Brig-Jen (Rtd) Datuk Goh Seng Toh was quoted as saying that there were discussions, workshops and mini workshops on the matter.
The final unanimous decision was that the industry should progress to BTS 10:90 (10% downpayment during booking and 90% via progressive payments), but it encountered disagreement from certain parties.
“Even a timeline for its implementation was drawn up. However, due to immense lobbying by vested parties, it was never implemented. We believe if it had been implemented, the housing industry would be on firmer ground and not in its present predicament,” Goh had said.
According to Khazanah Research Institute, STB has created problems such as buyers affected by abandoned, delayed and ‘sick’ housing projects. There are on average 30,000 house buyers being affected every year.
Its director of research Dr Suraya Ismail was reported as saying by The Sun that government spending to revive abandoned projects has reached an average of RM33 million annually, with the total being RM219 million.
She explained that STB allows developers to sell the units first, using the purchasers’ money to lock in profits and have two to three years to build the houses.
“This delivery method therefore disincentivises shorter building periods with the utilisation of better technology (such as the Industrialised Building System and other modern building techniques)," she was quoted as saying. – The Vibes, October 27, 2023
