If you keep an eye on global technology trends, you have likely heard of eCommerce giant Amazon’s groundbreaking patent from years ago: Anticipatory Shipping.
Powered by advanced predictive algorithms analysing past browsing behaviour, cursor hover time and purchase frequency, this logistics framework packs and ships items before a consumer even clicks buy, placing the package at a micro-fulfilment centre closest to the user’s home.
This ship first, buy later strategy is widely considered the holy grail of modern eCommerce.
In the property market, the build-then-sell (BTS) model championed by industry experts shares this exact underlying economic logic.
Advocates argue developers should self-fund or secure corporate loans to complete housing projects 100% first, allowing buyers to inspect finished properties and pay only when satisfied.
Isn’t this just the real estate equivalent of ship first, buy later?
Yet while hailed as a masterpiece in retail, this predictive framework fails when applied to property development.
Whenever opposing developers speak out, their arguments typically revolve around prohibitive holding costs and cash flow truncation.
Consequently, the moment proponents bring up the human tragedies of abandoned housing under the sell-then-build (STB) system, developers fall silent.
To understand this deadlock, we must look beyond developer cash-flow complaints and analyse the issue through risk and prediction management: Why is forcing a blanket BTS model in modern Malaysia destined to remain an illusion?
Asymmetry of error cost
Every economic decision consists of prediction and judgment. Amazon dares to practice Anticipatory Shipping because it calculates the price of a wrong prediction using counterfactual thinking, that is, what is the penalty if the artificial intelligence (AI) predicts incorrectly and the consumer rejects the item?
> In eCommerce: If AI wrongly predicts you need a box of diapers, the penalty is merely a RM10 to RM20 return logistics shipping fee. The item returns to the warehouse, sells to someone else at a slight discount or is gifted for public relations.
The cost of error is negligible and manageable.
> In property: A developer must predict market appetite three to five years into the future without a single committed buyer. If they misjudge demand for a specific housing product in a specific location, the project morphs into a massive overhang, creating an immovable financial chokehold worth hundreds of millions of ringgit.
The data vacuum
Amazon dares to ship before an order is placed because it possesses vast oceans of high-frequency, real-time user data to fuel its predictions.
In stark contrast, the Malaysian property market currently operates in a severe data vacuum.
When a developer plans a project, taking years from land acquisition to final delivery, what data do they actually possess?
More often than not, they rely on outdated census reports or lagged, superficial market surveys.
Proponents often counter by pointing to the automotive industry, arguing that cars are also built before being sold despite high manufacturing costs.
However, this argument ignores the defining law of real estate known as spatial fixity.
A car can be manufactured in a central facility and shipped wherever demand shifts.
A property is permanently pinned to the land.
If a developer builds 500 condominium units in an area where demand suddenly evaporates, these buildings cannot be relocated. They become permanent, immovable monuments to a failed prediction.
Without a mature PropTech ecosystem, forcing developers to pivot entirely to BTS is the equivalent of ordering a blindfolded driver to race down a dark highway at night.
Western model illusion
Proponents of BTS in Malaysia often point to Australia and the United Kingdom as shining beacons of success.
This comparison collapses under scrutiny because it fundamentally misunderstands what the Western model actually is.
In a pure BTS system, a developer builds entirely on speculation and puts units on the market only after completion.
Australia and the United Kingdom actually use a sell-then build-then pay (deferred-payment hybrid) system.
Developers still sell the concept using blueprints and brochures first to lock in market demand.
More importantly, this deferred-payment hybrid is kept alive by a multi-layered institutional safety net: mandatory performance bonds, bank guarantees, lump-sum fixed-price builder contracts and mandatory home warranty insurance.
Demanding Malaysia adopt this model without first building this massive financial and insurance framework is economically reckless.
The real cure for abandoned housing
BTS advocates are driven by a noble cause to eradicate human tragedies caused by abandoned housing projects when rogue developers default.
The STB model, when poorly regulated, undeniably forces innocent buyers to shoulder immense risk. However, the correct solution to a faulty braking system is to fix the brakes, not scrap the vehicle.
Singapore uses the same STB progressive payment scheme as Malaysia, yet avoids systemic abandoned projects through two key institutional safeguards:
> Housing developers’ rules: Progressive payments are locked in audited project accounts and can strictly only be drawn to pay for that specific development.
> Build-to-order mechanism: Through the Housing and Development Board, the Singapore government gauges actual market demand by inviting flat applications first.
Construction begins only after securing a healthy threshold of committed buyers.
To protect buyer interests, the government’s priority should be to tighten financial enforcement and build structured demand-gauging mechanisms, rather than forcing an unachievable BTS mandate.
Forcing a blanket BTS rule would raise financial entry barriers so high that it would wipe out a vast majority of local small to medium developers.
The future belongs to hybrid systems
Does a pure Anticipatory Shipping model actually work for real estate anywhere in the real world?
No. Amazon never drops unordered boxes on your doorstep because the price of error is too penalising.
Likewise, a pure BTS model fails in property because building entirely on speculation creates massive, unmanageable risk.
Both retail and real estate have independently realised the same truth: The future belongs to hybrid systems.
The housing debate in Malaysia should not be a shouting match between an outdated STB system and an unachievable BTS dream.
Amazon dares to ship before you buy because it holds the predictive data to read your mind.
Malaysian developers dare not build before a blueprint is sold because, in our current immature data landscape, no one can see three years into the future.
Until big data and PropTech completely modernise Malaysia’s real estate supply chain, aggressively mandating BTS merely converts the isolated risk of abandoned projects into a systemic tsunami where society at large bears the brunt of a housing market collapse.
