THE Ninth Malaysia Plan (2006-2010) has set the housing target for the nation at 709,400 units for the next five years.
Once again, the private sector is expected to drive housing growth, with private developers given the job of building 511,595 units (72 per cent of the total).
The Government’s strategy in encouraging the private sector to take the lead in housing has been very successful as can be seen by the 2.9 million units delivered by private developers to the rakyat to date.
However, recent calls by certain quarters to adopt a build-and-sell model for housing could well jeopardise achieving the target.
It would also be the death knell for smaller developers, who play a critical role in housing delivery in the smaller towns and less developed parts of the country.
While small and medium- sized enterprises in other sectors such as manufacturing and services are given special attention and assistance for their potential to add value to the economy, SME developers unfortunately receive no such preferential consideration.
It was reported in Bank Negara Malaysia’s Annual Report 2005 that the central bank had set up five special funds totalling RM8.9 billion to provide SMEs with access to financing at reasonable cost, but none of these funds is accessible to SME developers.
Instead, we are subject to onerous regulatory requirements - low-cost housing quotas, Bumiputera discounts and housing quotas, and deposits for developer’s licence.
Despite the lack of real support, many SME developers have provided housing in niches where the bigger players would not venture. And we must state that we have done this successfully throughout the country.
The basis of this success lies in the sell-and-build system of housing delivery practised in the country over the last 30 years.
If the build-and-sell system was to be adopted, what would happen to SME developers?
Would banks step in to provide the necessary financing for projects in smaller towns and less developed areas?
Who would help to buttress the Ninth Malaysia Plan housing targets?
Will it be confined to a few big developers?
We, in the Real Estate and Housing Developers Association (Rehda), sympathise with those buyers who have suffered losses as a result of projects being abandoned.
But do not punish the good SME developers for the misdeeds of the few errant developers (some may be big ones as well) by adopting a one- size-fits-all approach.
Small can be good and beautiful, too.
REHDA MEMBERS(This letter was signed by Rehda national council member ANTHONY CHO and the chairmen of Rehda branches in Malacca, Pahang, Terengganu, Kelantan, Kedah/Perlis and Negri Sembilan)
Peaceful Co-existence written by Nicole Tan Lee Koon,
Monday, May 01 2006 12:53 pm
The Sell then Build (STB) and Build Then Sell (BTS) systems should co-exist. The buyers are then at liberty to choose which system that caters to their needs.
In the meantime, it would be good to look into the current legislations on STB to ensure that the repeat offenders (including the directors and shareholders of the Developer) are punished and barred from development. To add further protection for the buyers, for e.g., instead of relieving the developers upon vacant possession, it should be upon issuance of Certificate of Fitness for occupation.
As for the BTS, to ensure that the banks play a bigger role than just providing financing. Banks should treat themselves as partners for each project to ensure the success of the projects and also to share the risks together with the developers. 10/90 cannot be adopted lock stock and barrel but should be adapted to our local needs.
REVERT TO B.T.S SYSTEM! written by Stephen Tan Ban Cheng,
Tuesday, May 02 2006 07:33 am
Many purchasers have been burnt by the experience of developers under the SELL THEN BUILD (STB) system.
Redha must be honest enough to own up that far too many Malaysians have been adversely affected by this nonsense.
When we bought our houses in the 1900s and the 1920s and even the 1950s till 1960s, we had no problems dealing with developers who BUILD THEN SELL (BTS).
Let us revert to the tried and tested method where developers are a lot more SOCIALLY responsible.
There is no doubt that the BTS method will ensure that only genuine developers are in the trade, not fly-by-night operators out to make a fast buck at the expense of the ordinary, and often deprived Malaysians.
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The Sell then Build (STB) and Build Then Sell (BTS) systems should co-exist. The buyers are then at liberty to choose which system that caters to their needs.
In the meantime, it would be good to look into the current legislations on STB to ensure that the repeat offenders (including the directors and shareholders of the Developer) are punished and barred from development. To add further protection for the buyers, for e.g., instead of relieving the developers upon vacant possession, it should be upon issuance of Certificate of Fitness for occupation.
As for the BTS, to ensure that the banks play a bigger role than just providing financing. Banks should treat themselves as partners for each project to ensure the success of the projects and also to share the risks together with the developers. 10/90 cannot be adopted lock stock and barrel but should be adapted to our local needs.