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Build-and-sell concept delayed by economic downturn

19/01/2009 The Star By Christina Tan

KLANG: The build-and-sell concept will not take off in full swing due the current global economy meltdown, said Housing and Local Government Minister Datuk Seri Ong Ka Chuan.

He said the government had to take into consideration various issues including the financial aspect when implementing the new system.

Ong said the build-then-sell concept works on a ratio of 10:90, where house buyers pay 10% of the purchase price first and the remaining 90% upon completion.

“Unfortunately, the system could not be implemented fully just yet because of the global economy situation now.

“The government is very careful (in implementing the new concept), not because we want to protect the developers but because the housing industry is very important to the country as it creates lots of job opportunities,” he said after launching SP Setia 5:95 home loan package on Monday.

Ong said if the government was not careful enough, it might kill the housing industry.

Unlike big developers, the smaller players might fail to gain the confidence of the banking sector to acquire loans to start their projects, he said.

As a result, the ministry had suggested running the new concept parallel with the existing housing development system, Ong said.

However, the government welcomed developers who executed the new concept on their own initiative, he said.

The government would encourage such developers by giving them some incentives, he said.

Ong added the new system would be implemented when the infrastructure was ready and the financial institutions well prepared.

Ong also said 100,000 housing units were being built every year and 2.7mil units had been built over the past 25 years, however, 30,000 units were still abandoned.

He said there were some 80,000 units abandoned initially and the government managed to salvage these projects and brought down the number by 40,000.

He added the new build-and-sell concept came after the ministry received a lot of complaints by house buyers about abandoned projects.

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