AFTER nearly two decades in hibernation, the Build-Then-Sell (BTS) housing model is inching towards implementation.
Putrajaya‘s aim is to make abandoned homes a thing of the past. For now, it is enticing developers with incentives to adopt the BTS model over the conventional Sell-Then-Buy (STB) one.
Details of the incentives are expected to be announced after the tabling of the 2026 Budget in October.
BTS isn’t a new idea for Malaysia. For at least one developer, Bandar Utama Sdn Bhd, BTS is a workable one, a local business daily reported on Nov 19, 2001.
In April that year, the developer sold 100 units of two-storey link houses — ready with a certificate of fitness, priced from RM550,000 to RM780,000, in just four hours.
According to its director, Datuk Tiong Chiang Kok, the company’s move from STB to BTS was a natural progression.
If BTS worked as long ago as 2001 for a reputable developer, why aren’t the rest jumping on the bandwagon?
There are few reasons why the rest are not so enthusiastic, but the principal one is that BTS doesn’t guarantee a steady stream of cash flow for developers like STB.
By the time the houses are completed under the STB model, 90 per cent of the money is in. For BTS to work, developers must be financially sound. Many aren’t. This is why a great majority of developers, including the financially sound ones, do not want the government to make BTS mandatory.
They ask, why discard STB when it has worked so well? Has it? Certainly not for the buyers, whose plight is a never-ending story of abandonment in two senses.
One is the literal abandonment of buyers’ dream homes. The other is the metaphorical abandonment of the buyers by the authorities.
Granted, as the Real Estate and Housing Developers’ Association (Rehda) says, many of the developers of abandoned housing projects are unlicensed ones. But many aren’t all.
Let the numbers speak. Quoting the Rehda Institute, media reports say there were 42,757 abandoned housing units worth more than RM12 billion up to Aug 31 last year. Of this, 12,378 housing units were built by unlicensed developers, with Selangor, Negri Sembilan and Kelantan topping the list.
How is this even possible? To some extent, the blame must rest on the shoulders of unwary buyers, of whom there are plenty. But much of it must be directed at the authorities in the three states.
That still leaves 70 per cent of abandoned housing units in the irresponsible hands of licensed developers who don’t deliver. This is why the BTS model is the key to solving the “late, sick and abandoned housing projects”, as the National House Buyers Association has been arguing for 18 long years.
The law is there in the Housing Development (Control and Licensing) Regulations, but the ministry has opted for cohabitation of STB and BTS models. It is time for Putrajaya to make BTS mandatory.
This is the only way to weed out developers who are not financially sound and lack a good track record. BTS may lead to fewer developers, meaning fewer projects. Fewer is better than none.
© New Straits Times Press (M) Bhd
