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Model for compromise

21/09/2002 Published in NST-PROP A Buyer Watch Article by National House Buyers Association

A system that has been practised over a long period of time eventually becomes the accepted norm in a society.

In perpetuating the present delivery system of sell then build, which the House Buyers Association feels is grossly unfair to buyers, it would appear that we have unwittingly acquiesced to the adage of, “a wrong thing when done over a period of time will become a right thing.”

However, all said and done, we are also aware that to stubbornly and blatantly champion the case for an outright “build then sell,” concept is being unreasonable. It may be too drastic a step, especially if it is implemented without any lead-in period.

Hence we advocate that a variant of the “build then sell,” concept be studied. If we look at the system in Australia, house buyers pay only 10 per cent of the cost of the house upon signing the Sale and Purchase Agreement. The remaining 90 per cent is only paid up when the house is ready for occupation.

We see this as a fair and practical concept. The developers will be assured of the committed sales and can concentrate on completing their projects on time and with good quality. The financial institutions will progressively release the funds to developers and will be in a better position to ensure there is no diversion of funds.

Best of all, house buyers will be exposed to less risk because in the worst scenario, they may only lose their 10 per cent payment downpayment, compared with the risks current house buyers in our country are exposed to.

There are many practical variants to the “build then sell,” concept. We should urgently give them serious thought. The situation cannot be allowed to drag on because there are just too many property buyers out there whose dreams have been turned into nightmares when they were left to shoulder huge housing loans for nothing.

HBA proposes that state-related projects should take the lead in implementing the build then sell principle. All said, it would be an ideal situation if property developers fully complete their products and then offer them for sale in strict accordance with the concept.

If we aspire to reach the status of a developed country, it is time for us to bite the bullet and to direct the property industry away from the current system of buying off the plan.


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