Consumer Can Expect Lower Housing Prices Under BTS Concept
11/05/2007 Bernama

KUALA LUMPUR, May 11 (Bernama) -- Consumers can expect lower housing prices under the proposed 10:90 Built-Then-Sell (BTS) concept, supported by government's incentives and shorter time for development approvals, according to the Institution of Surveyors Malaysia (ISM).

A paper presented today by the ISM's BTS committee said the government provided incentives to developers utilising the BTS system by exempting them from paying the RM200,000 deposit fee for developer's licence.

The incentives included speedier development approvals within four months, said the ISM in the paper prepared by deputy president Abdullah Thalith Md Thani and committee member Dr Zailan Mohd Isa.

Another incentive for developers was the full release from low-cost housing construction quota which under the current practice, they are required to allocate 30 percent of the developments for low-cost housing. However, the developers are encouraged to build medium-cost houses.

All these savings could in turn be passed to house buyers, the ISM said. The paper on the findings of the BTS concept by ISM was presented at the "Build-Then-Sell: The Way Forward" seminar here by Zailan.

In the proposed BTS system, house buyers need to pay 10 percent upon signing the sales and purchase agreement and only have to make full payment upon completion of the houses.

Under the present Sell-Then-Build (STB) concept, buyers have to make bookings and pay 10 percent of the sales price upon signing of the sales and purchase agreement.

Acknowledging that the STB system has worked well for the country in past years, Zailan said the BTS system is expected to improve the housing delivery system.

She said the system would filter out the bad developers from the industry and eliminate the practice of fictitious sales among errant developers.

Eventually, the housing development industry would be self-regulated in the long run as developers would not be paid before delivering their houses to buyers, she added.

Zailan said the government's move to improve the housing delivery system would lead to greater efficiency in housing projects, highly quality homes and faster completion of housing units.

"The construction sector, especially housing development, should continue as one of the main contributors with significant spillover effects on the economy," she said.

According to the ISM, the STB and BTS concepts should be viewed as business strategy in delivering housing units into the market.

"The improvement in the delivery system in housing development has to holistic, involving both the public and private sectors, particularly key players in producing housing units into the market," it said.

The BTS concept was announced on April 13 by Prime Minister Datuk Seri Abdullah Ahmad Badawi with the aim of improving the housing delivery system.

-- BERNAMA