'Give house buyers a choice'

 20/02/2006 NST

KUALA LUMPUR, Sun. - House buyers should have a choice when it comes to housing delivery systems in the country.

The Real Estate and Housing Developers’ Association (Rehda) feels it is not viable to only have the "build then sell" system, a Press conference here heard yesterday.

Instead, buyers should be given a choice, said Rehda president Datuk Jeffrey Ng Tiong Lip, and the currently practised "sell then build" system, the proposed 10:90 payment model and the "build then sell" system should all co-exist.

Under the "build then sell" system, developers are not allowed to sell a property until it is completed.

Under the 10:90 payment model, buyers pay 10 per cent of the purchase price into an account and pay the remaining 90 per cent only when the house is completed.

Ng said making the "build then sell" system mandatory would affect the country’s home ownership agenda as well as the economy as "60 per cent of developers would go out of business".

Ng was responding to the call by the House Buyers Association (HBA) for the 10:90 payment model to be used to better protect consumers.

On Friday, the Malaysian Bar Council, Federation of Malaysian Consumers’ Associations and the Consumers’ Association of Penang said they supported the 10:90 payment model.

Bar Council president Yeo Yang Poh said consumers had to be protected from abandoned housing projects.

"The 10:90 payment model is the way forward," Yeo told a Press conference. "The law is supposed to take care of the issues and problems of society, especially when they concern something as basic as having a roof over your head."

According to the HBA, Rehda had said property developers here had to subsidise low-cost housing, make capital contributions to utility companies and comply with Bumiputera quotas and discounts.

"These issues need to be addressed and are not arguments to assist economically sensible reforms," said the HBA.

However, Ng said if the "build then sell" concept were introduced, then bankers would have to play a key role in providing project financing.

"There is no country in the world where the ‘build then sell’ system is the only system," he said.

Ng noted the present "sell then build" system had successfully helped in the production and completion of 675,000 housing units by the private sector under the Eighth Malaysia Plan.

On the value of abandoned projects standing at RM7 billion in 2004, Ng said this was an accumulative figure over a 15-year period, and projects worth RM5 billion could be revived, if they were not already.

Meanwhile, Lembah Beringin House Buyers’ protem committee chairman Gevanantham Marimuthu, 52, said most house buyers were at their wits’ end.

He said only 100 houses were occupied as the other 1,900 were still not completed. Of that number, 900 house-building projects had been abandoned.

"We have been waiting since 1998 for our houses to be ready. Three house owners have already passed away."

Gevanantham was all for the 10:90 model, saying it would ensure a fairer deal for house buyers.