Rehda: 'Build and sell' needs
closer look
13/08/2004
theedgedaily.com By Reese Loh
The implications of the 'build and sell' concept on the housing and
property industry and the economy need careful consideration by the
government before its implementation, said Real Estate and Housing
Developers’ Association (Rehda) deputy president Ng Seing Liong.
He said the 'build and sell' concept might help to address house
buyers’ complaints and dissatisfaction with regards to timely
delivery and quality but there were other important national
objectives that must be considered.
Ng said the industry had not achieved the level of maturity to adopt
the concept.
The adoption of the concept might result in a significant reduction
in house production with potentially severe social and economic
implications, he said at a two-day seminar of the National Housing
and Property Summit 2005 in Kuala Lumpur on Aug 13.
Ng said based on the concept, financial institutions were not likely
to lend to developers when they could not gauge the viability of
projects. He added that even under the present 'sell then build'
system, banks had been known to be reluctant to lend in non-risk
proof conditions.
He said under the 'build and sell' scenario, very few developers
would have the financial capital or capacity to carry out
development projects on their own without financing from either
purchasers or banks.
"This will lead to a situation where housing output and the number
players will drop drastically, resulting in higher house prices," he
said.
Ng said the amended Housing Development Act had served as an
effective tool to address buyers’ problems and complaints by
providing protection for them.
He said the establishment of the Tribunal for Homebuyers’ Claims had
provided an additional safeguard for the house buyers.
Ng said while the 'build and sell' concept was viewed by many as the
answer to issues in the housing industry, it should be balanced with
other important considerations such as the impact on the economy,
social implications, employment and housing affordability.
Meanwhile, Meda Inc Bhd executive director Ong Bok Siong suggested
that the 'build and sell' concept could co-exist with the present
system at a later period, with incentive given to those adopting the
new concept.
He said projects would also have to be downsized into small phases
so that adequate funding for 'build and sell' could be acquired.
