The “build first, sell later” concept if implemented will cause the prices of houses to go up, Real Estate and Housing Developers Association (Redha) Penang branch adviser Datuk Ong Gim Huat said.

He said that under the concept, developers would have to complete the project first and wait for buyers.

“While waiting for buyers, we have to incur holding costs, which eventually will be transferred to purchasers themselves and this will cause the prices of the houses to go up,” he said yesterday .

Jelutong MP Lee Kah Choon was reported as saying that the Government should re-examine the “sell first, build later” housing policy as the concept places risk on buyers instead of on developers.

Ong added that the concept was not suitable for a developing country such as Malaysia where mass housing was needed.

On suggestion by Lee that a revolving fund be set up to ensure developers would not misuse the sinking funds, Ong said the issue would not arise if purchasers were prompt in paying their maintenance fees.

“The problem now is purchasers usually default in their payments causing the developer to use the sinking funds to maintain the common areas of the project,” he said.

Penang Master Builders and Building Material Dealers Association chairman Datuk Tan Seah Tee concurred that although the move was to safeguard the interest of purchasers, they would end up paying more for their property.

“For example, to buy an apartment now, one need to pay RM150,000 but if the Government implemented the build first, sell later concept, purchasers might end up paying RM180,000,” he said.

Deputy Chief Minister Datuk Dr Hilmi Yahaya said he agreed with Lee’s proposal to ensure that projects are completed.

“The risk of a project being abandoned is there with the current practice of selling first then build later,” he said at a press conference to announce a charity dinner to raise funds for the TYT Disaster Fund yesterday .

Consumers Association of Penang (CAP) head of complaints department Ravinder Singh welcomed the move as it would help cut down on abandoned projects and served as an added protection for consumers.

The association has been advocating this for many years, he added.