Don't make build-then-sell system compulsory: Rehda
NEW STRAITS TIMES 24/09/2005

THE Real Estate and Housing Developers' Association Malaysia (Rehda) said while it is not against the proposed build-then-sell system, it hopes the Government will not make the concept compulsory.

Its president Datuk Jeffrey Ng Tiong Lip said both the sell-then-build and the build - then-sell systems have worked well for the country and there was no need to change.

Ng said the people should be free to choose which type of concept they want.

"Why should we change the present sell-then-build system that has produced 3.5 million completed houses over the last 30 years and produced significant economic contribution for the country." he said.

Ng said this when addressing the press on Rehda's 11 points on the subject.

"Firstly, we strongly believe that there must be a balance between national economic interest and group of vested house buyers.

Ng said if the build-then-sell proposal is implemented the construction industry will shrink "very significantly and impact on the economic front".

"This will lead to jobs slashing in the construction and related industries such as building material supplies professional surveys real estate agencies and valuation,"
he said.

Ng said he also fears that house prices will rise significantly and at the same time slow down housing I construction and cut the number developers Ng expects house prices to increase between 30 and 50 per 4 cent and production to drop by at least 60 per cent.

Rehda also urged the Ministry of Housing and Local Government to continue punishing the few "black sheep" in the industry.

Ng said a clear message must be sent to the market that non-compliance with the Amended Housing Development Act 2002 will lead to severe consequences such as loss of license for the developer.

On another point, Ng said, introducing the 10:90 concept proposed by the House Buyers Association will put local developers on an uneven playing field.

He said developers here, unlike its counterparts in Australia where the idea was originated from, continue to subsidies low medium cost projects, perform infrastructure work and are subject to Bumiputera quota, which has held back productive resources.

He also said that under the new proposal, financial institutions would lend support to big developers with sound financial standing, while smaller developers with little financial capital will be forced to close down.

"Would this mean that all the smaller town developments will come to a grinding halt? I think it is very clear that as far as the financial institutions are concerned when it comes to credit risk management it is obvious who they will support," he added.

Ng said Rehda's stand on the matter includes not only the views of its 1,100 members but also others related to the industry Ng said Rehda together with the Malaysian Institute of Architects, Institution of Engineers, Association of Consulting Engineers Malaysia, Associated Chinese Chamber of Commerce and Industry Malaysia and other non-governmental and trade associations are all against the build-then-sell concept.