Developers may be told to adopt the ‘build and sell’ concept
22/05/2004 NST By Firdaus Abdullah

Build and then sell may be the order of the day for housing developers soon. Datuk Seri Abdullah Ahmad Badawi said today that the Government wanted developers to have funds in hand before embarking on projects.

"We want developers to have adequate funds and not sell first to get the money to build," the Prime Minister said.

Abdullah said his primary worry was about people who had paid for houses and later found the project abandoned.

In the past, thousands have ended up in this predicament, repaying loans to banks for non-existent houses. In some cases, the Government had to step in to complete these projects.

"I think it is not right to pay money first before you get the house. When you pay, you must get the house," Abdullah, who is also Finance Minister, said.

Abdullah's proposal, his aides said, was in line with his policy of best practices in business and also to ensure that buyers were not victimised by financially strapped and unscrupulous developers. The large number of abandoned projects in the past were his main cause of concern, the aides said.

Speaking at a news conference after attending the Public Sector Workers Day gathering at Intan Bukit Kiara here, Abdullah said developers in most countries, including Taiwan, were bound by the "build and sell" concept where buyers could inspect the houses before purchase.

However, Abdullah said the Cabinet would deliberate the issue before a final decision is taken.

The "build and sell" idea has been debated previously, including in Parliament, but did not materialise.

Smaller developers had argued that they required deep pockets for the build-and-sell concept.

They also argued that holding costs and interest payments would lead to higher house prices.

Currently, several of the big developers are practising the build-and-sell concept. However, the large majority prefer to launch the projects, collect bookings and arrange bank loans for the customers.