Build and sell
better housing
24/05/2004
NST
NO one in his right mind would commit a large chunk of his present
and future savings to a major purchase on the strength of a glossy
brochure. Yet that is how most people buy their most valued asset —
their homes. A majority of housebuyers survive the gamble, or have
some means of living with its uncertain outcome. Others are less
lucky. When the time comes for them to take possession of their
completed units, they run into a wall — a sort of caveat emptor
which gives little incentive to developers to compensate for falling
short of their promises or not delivering at all. There are, of
course, legal remedies. But these can be costly and time-consuming.
The lopsidedness of the housing market in favour of the developers
has been created by demand greatly exceeding supply. The Government,
anxious to provide housing for a growing population and
fast-expanding economy, has thus far chosen not to interfere. Banks
have been in on it too, cutting it both ways by lending bridging
financing to developers and signing up prospective buyers to
long-term secured loans. The consumer, caught in the middle, is
disempowered in his purchasing decision the moment he puts his name
on the dotted line.
An obvious solution exists to bring balance to such property
transactions, and has been floated for some time: Build the units
before they can be sold. The Prime Minister said on Friday that the
"build and sell" concept may now have to be imposed on reluctant
developers, both to ensure best practices and protect consumers.
While welcoming the proposal, Housing and Local Government Minister
Datuk Seri Ong Ka Ting advised caution on Saturday, saying that the
concept could so upset the industry applecart as to curtail housing
development, if not the economy itself.
Some concessions may be due to the smaller developers but these are
no answers to a crying need for reform in the ways they do business.
Indeed, "build and sell" would favour the better endowed, more
reputable firms, as perhaps it should. The low end of the industry
can hardly use its lack of capacities as an argument for
compromising consumer guarantees and product quality. Now that the
property sector has stabilised somewhat, consolidation should be
encouraged by the discipline of having to build projects before
bringing them to market. The sooner this is done, the better. |
| |
|
