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Paying mortgage, but no house in sight
20/5/2006 NST By Reme Ahmad


Thousands pay for abandoned projects for fear of being blacklisted by banks

For 23 years now, the family of Ms Rosnah Halim has been dutifully paying RM292 (S$128) a month as mortgage for a single-storey terrace house in Negeri Sembilan, even though the project has been abandoned by its developer long ago.

'My little baby has become a working man, but I still do not see much hope that the project will ever be ready,' said the 49-year-old traditional masseuse.

She is among thousands of house buyers across the country whose projects have been abandoned by the developers, but these victims cannot stop paying the monthly mortgage because they fear their names would be blacklisted by local banks.

Tens of thousands of innocent buyers face financial distress because of the abandoned housing projects, Mr Chang Kim Loong, secretary-general of the National House Buyers Association, said in a letter sent to newspapers two weeks ago.

Government records show that there are currently some 90,000 units from 261 projects, with a market value of RM8 billion, that have been abandoned.

A project is defined as abandoned if it is not complete and if no construction is taking place six months after the scheduled completion date.

While some projects were abandoned due to the 1997/98 Asian financial crisis, others were simply scams.

'The issue is a huge concern as it has been going on for years,' said Mr Darshan Singh, manager of the National Consumer Complaints Centre.

'We do not seem to have the political will to protect house buyers.'

But with consumer activists now demanding that the government take action, some change could be in the offing.

Housing and Local Government Minister Ong Ka Ting said recently that his ministry had completed its study on the issue and plans to present it to the Cabinet soon.

Details of his study are not known, but consumers want the current sell-then-build practice for projects to be replaced by a build-then-sell concept.

But real estate developers object to any such move.

The Real Estate and Housing Developers Association said that 60 per cent of them would be pushed out of business as they have to fund much of the project.

Quite likely, the debate will continue while thousands will continue to pay for a house they may not own in their lifetime.

 

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