Ninety pct developers cannot afford build and sell concept - Ong

Utusan.com.my 23/5/2004

KUALA LUMPUR May 22 - Some 90 percent of Malaysia's real estate developers are not prepared to implement the "build first, sell later" concept for houses due to financial reasons, Housing and Local Government Minister Datuk Seri Ong Ka Ting said.

He said most developers lacked the capital to proceed on such a basis as they needed the involvement of buyers to obtain loans from financial institutions.

Speaking of Prime Minister Datuk Seri Abdullah Ahmad Badawi's call for the scheme to prevent losses to consumers if projects stalled, Ong said: "If we do this and use the developers' money only, many of them will not be able to carry out development projects".

The Ministry would, however, try to look for ways the scheme could be implemented and how long it would take and present the findings to the Cabinet, he said here Saturday.

On the many abandoned development projects nationwide, Ong said various efforts had been taken to solve the problem including by tightening licensing conditions for developers.

Ong said the changes in 2002 had allowed for better monitoring of projects and overcoming weaknesses which had allowed many developers to start projects indiscriminately but which ended in financial troubles.

"The weaknesses were clear after the financial crisis in 1997 and 1998. Now we are trying to fix things," he said.

Ong also called on cooperation from the Real Estate and Housing Developers Association as their members had often rebelled against the tightening of conditions.

"However, when projects become abandoned, they blame the government," Ong said.