Rehda calls for win-win
approach
30/09/2005 The Sun
THE build-then-sell method should not be made mandatory, but could coexist
with the present sell-then-build method, says Datuk Jeffrey Ng, president of
the Real Estate & Housing Developers' Association (Rehda) Malaysia.
The existing system is a proven one and has successfully delivered more than
three million completed homes, Ng says in a statement. Housebuyers must be
given the right to choose to buy completed homes in the primary or secondary
market, or homes under construction, based on their needs and affordability.
Under the present system, thousands of completed homes are made available
for buyers to choose from, which essentially, is build-then-sell is all
about!" he adds.
The coexistence of both systems and the success of anyone system will be
determined by market forces, Rehda believes.
Ng says under the proposed 10:90 variant, the construction industry will
shrink further in terms of business activities and employment, with demand
for materials, professional services and downstream businesses falling.
Rehda also anticipates house prices will rise between 30% and 50% and annual
housing production will be reduced by at least 60%.
Many industry players and trade associations such as architects, engineers,
contractors, developers and others have voiced their opposition to making
the build-then-sell method mandatory.
On the issue of abandoned projects, Ng notes that amended housing
legislation is sufficient to act against errant developers. The activities
of developers are now more regulated and more amendments to legislation will
afford greater protection to housebuyers.
Rehda also says the proposed 10:90 variant is a copy of the Australian
system. It argues that conditions here and in Australia are not the same and
that developers here are subject to conditions like subsidising low-cost
projects, making contributions for utilities, building infrastructure and
complying with quotas and discounts.
The association calls for a "balance between our country's economic interest
and a small group of vested interests" and agrees that housebuyers should
not be made to suffer hardship caused by errant developers.
"It is important to acknowledge that there are many thousands of housebuyers
who are satisfied with the outcome of the present system delivered by good
and responsible developers in terms of product satisfaction, price
affordability and lifestyle creation," Ng said.
The House Buyers' Association (HBA) has proposed a 10:90 concept to replace
the sellthen-build model practised by most developers. The proposal is a
variation of the build-then-sell concept broached by Prime Minister Datuk
Seri Abdullah Ahmad Badawi to reduce the number of abandoned projects.
Under sell-then-build, investors buy a property off the plan, with the risk
that the project could be abandoned or not built to specifications. "What we
are proposing is for housebuyers to be insulated against the risks of buying
a house," HBA vice-president Brig-Gen (B) Datuk Goh Seng Toh said.
HBA has presented its proposals to the Public Accounts Committee (PAC). PAC
chairman Datuk Shahrir Abdul Samad has criticised the Ministry of Housing
and Local Government for being too defensive of developers. The minister
Datuk Seri Ong Ka Ting said the decision over which method to implement
would be taken by the Cabinet and not the ministry. Ong also said that the
ministry was compiling feedback and information from various quarters before
presenting a paper to Cabinet.
Aside from protecting housebuyers, the build-then-sell model has several
other advantages, the HBA argues. It would mean developers would undertake
launches of properties they are confident of, conduct stringent visibility
studies and produce better-quality houses.
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