End the suffering now
NST 12/08/2006  By Yin Ee Kiong, Batu Ferringhi, Penang

I refer to the story titled "No such thing as a risk-free business" published in your Viewpoint column last week (NSTProperty, Aug 5, 2006).

The old adage "No risk, no gain" is as true today as it was in the past. As any sixth former doing economics will tell you, risk bearing is one of the primary functions of a businessman. Like death and taxes, it is an immutable fact of life.

For developers to think otherwise and cling to the old Sell-Then-Build (STB) way is foolish. They should just be thankful for the good run they have enjoyed for the past 40-odd years, during which time buyers have borne the main risks ... with unfortunate consequences for thousands.

Instead of bellyaching, developers should instead look at "new order" work.

In a previous Viewpoint, it was mentioned that buyers might renege on their deals if the 10:90 concept of housing delivery (involving a 10 per cent downpayment and the balance upon completion was adopted because the economy at the point when the units are ready might either be soft, or because house may have tumbled.

Such speculation serves no purpose. House buyers are unlikely to renege for the simple reason that they know they can be subject to legal action that can be expensive, time consuming and in the end, self defeating.

As long as developers deliver houses of an acceptable quality and within the agreed delivery timeframe, I see no reason for concern. In any case, I am sure developers know what to do to protect themselves against buyer "pulling out" of an agreement.

In countries where the Build-Then-Sell (BTS) system is practised, there are set formulas to settle disputes, and there is no reason why this cannot be done here too.

As the National House Buyers Association (HBA) rightly pointed out, house buyers in particular and the nation in general have been carrying developers for far too long - the former from their private savings, the latter from public purse.

It is thus disconcerting to note that despite the Government favouring the 10:90 concept, developers are still trying to hang on to STB. Incorrigible cynic that I am, what is even more disconcerting is that some developers may try to do all they can during the two-year trial period when the 10:90 and STB are allowed to co-exist to prove that the former cannot work. I will only be too glad to be proved wrong.

Developers must stop thinking that the interests of house buyers (or the HBA) are inimical to their own.

It is time the Real Estate and Housing Developers' Association and the HBA, together with banks, work out something for the sake of long suffering house buyers.

Developers (and suppliers) have prospered, in countries where BTS applies, why not here?