Government moves on build-then-sell
01/10/2005 NST-Prop By Christopher Fernandez

The Government wants the various sectors within the housing industry to state whether they are willing to commit to the “build first, sell later” concept of housing delivery before it makes a decision on the matter.

Firm commitments on the method, dubbed the “10:90 model” by the National House Buyers Association (HBA), are required from all involved in the industry before the Housing and Local Government Ministry presents a paper on it to the Cabinet, said its minister, Datuk Seri Ong Ka Ting during the launch of the second national-level Malaysia Property Exhibition 2005 (Mapex) at the Mid Valley Exhibition Centre in Kuala Lumpur last week

He elaborated that the covenant is required from bankers, housing developers, contractors, architects as well as house buyers.

For banks, Ong said the Government needed to know whether they would continue providing loans to developers and house buyers if the concept was implemented.

However, Mapex organiser, the Real Estate and Housing Developers’ Association (Rehda), rejected the mandatory implementation of the concept (see accompanying story).

The 10:90 model practised in Australia requires buyers to pay 10 per cent of the property price as downpayment into an escrow account held by a stakeholder, with the balance payable only when the house is completed and delivered.

Ong said a draft of the Cabinet paper on build-then-sell concept, which Prime Minister Datuk Seri Abdullah Ahmad Badawi had called for, has been prepared and would be circulated to Government agencies for comment after feedback was received from the various parties.

He also said that between 2003 and August last year, 14,231 cases were filed with the Tribunal for Homebuyers Claims, the majority of them being claims for late delivery. Of these, 12,709 have been resolved.

He added that 112 developers have not complied with the decision of the tribunal and the ministry was preparing to take them to court on charges of criminal contempt.

Several developers who participated in last week’s Mapex - though disappointed with the turnout and the sales - were in agreement that the exhibition “is a good thing as it helps the housing industry, largely by creating awareness”.

Some of them, such as Bolton Bhd, Equine Capital Bhd and Mah Sing Properties Sdn Bhd, said they “expected more” during exhibition.

Bolton exhibited its Taman Tasik Prima in Puchong, Selangor, and Lavender Heights in Seremban, Negri Sembilan, while Equine Capital displayed its semi-dees in Pusat Bandar Putra Permai in Seri Kembangan and at Equine Park, both in Selangor.

Mah Sing Properties was happy with the on-site sales of its Damansara Lagenda and Aman Perdana ventures. Its presence at Mapex, a spokesperson said, was to take the opportunity to showcase its projects at the “one-stop” exhibition.

However, AP Land Bhd reported the sale of 20 terrace houses at Puteri Heights and RM5.6 million worth of units in Bandar Tasik Puteri.

A spokesman said the latter enjoyed good patronage because of a special package for buyers: They do not have to pay instalments on their loans for the first 12 to 18 months, depending on the type of unit they purchase.

Nine financial institutions were present at the expo to promote end-financing packages, while officers from the Housing and Local Government Ministry, Employees Provident Fund and the Treasury Housing Loans Division were also present to offer assistance to buyers.