PERAK is preparing for possible implementation of the build-then-sell (BTS) housing concept, says state housing and local government committee chairman Sandrea Ng.
While no decision has been made, Ng said, preparations were underway in case the Federal Government made BTS compulsory in the future.
“Perak needs to be ready in all aspects, including policy, implementation mechanism and industry readiness,” she said in reply to Steven Chaw (PH-Menglembu) during the Perak State Assembly sitting at Bangunan Perak Darul Ridzuan in Ipoh, yesterday.
“As part of early preparations, the state Housing and Property Board has held town halls with developers, financial institutions, property associations and other industry players for feedback on the needs, challenges and suitable financial models for BTS.”
Ng said studies were also conducted on successful BTS models in other states, while Perak’s readiness would be evaluated based on different segments and categories of the housing market.
“Several key factors must be considered, including the financial stability of developers, especially small and medium-scale ones.
“BTS requires high capital and there is risk of developers passing on the cost to consumers, leading to increased prices.”
She said bank financing, regulations, industry supply chain and market compatibility were also factors to be considered.
BTS, Ng said, was among models identified under the National Housing Policy to reduce the risk of problematic housing projects.
“Many countries consider BTS safer for buyers, as houses are sold only after completion.
“This reduces the risk of buyers getting trapped in ‘sick’ or abandoned projects.”
She contrasted this with the current sell-then-build (STB) model, where buyers pay in instalments before construction is completed.
“Such risk should not be put on the shoulders of consumers,” she said.
“With BTS, developers must finish the project before collecting full payment.
“This increases accountability and improves quality, as the homes will have been evaluated,” she said.
She noted that BTS has proven effective in Australia and Singapore, while the majority of problematic projects identified by the Housing and Local Government Ministry used the STB model.
“In principle, BTS is the right step – not a punishment for developers, but an assurance for the people,” she said.
To a supplementary question from Chaw, Ng said the Eco City project in Lahat, Ipoh, was categorised as a ‘sick’ project in April, adding that there was a dispute between the developer and landowner.
“The developer has informed the National Housing Department that they are trying to get funds to continue,” she said, adding that the project was only 24% completed.
