Government to study 10:90 concept
The Star 21/09/2005

PETALING JAYA: The proposal for housing developers to “build first, sell later” will be forwarded to the Cabinet soon.

Housing and Local Government Minister Datuk Seri Ong Ka Ting said developers have been resisting the concept but housebuyers were all for it.

“The Government has to look into this. If implemented, it must be done in a way that suits the Malaysian scenario.

“It is not that simple, as the housing industry is not just about the buyer and the developer. There are also the banks and other parties to consider.

“However, we are coming very close to a proposal for the Cabinet to decide on,” Ong said, adding that the House Buyers Association was pushing for the 10:90 build-and-sell model.

Under the model, house buyers pay 10% when signing the sale and purchase agreement.

It will be deposited with a stakeholder and the developer will build the house.

The remaining 90% will be paid later.

“The 10:90 model was actually my idea after a study visit to Australia to see how far they have implemented the build-and-sell concept.

“I told my officers after the visit to get feedback from various parties,” he said after launching ING Insurance Berhad's fixed rate home loan scheme.

Ong said safeguarding housebuyers' rights while ensuring the housing industry could continue to grow was the challenge faced in implementing the proposal.

The proposal would only be implemented when all the players in the industry had committed themselves to the move, he said.

“It is a very important and major decision the Cabinet has to make. I cannot say too much now. If I am seen to be inclined towards any side, people will speculate.”

Ong added that stringent measures were already introduced in amendments made in December 2002 to the Housing Development Act and parallel to that, the Housing Ministry would see to what extent the 10:90 build-and-sell model could be implemented.

“It is also not for the Government to announce such a proposal during the upcoming Budget. This proposal must be made on very balanced views and can be announced at any time.”

Ong said he decided to share this information to keep the people updated.

“Some have remarked that the Housing Ministry sits tight and does nothing. That is not a fair statement.

“If I say nothing, they will say I’ve done nothing. So now I’m saying something to let them know I’m doing something.”