well, all developer do that including big developer. if company capable to get loan, why not? coz example u have 100mil cash. this is sufficient to build 1 high end condo. but why not u borrow another 1 billion to build 11 high end condo?

Suppose I bought a shop for $x 5 years ago. For reconstruction insurance:
aa
how much should I insure the shop for this year?
bb
how can I best estimate the insured value for subsequent years? Pro-rate it to some building index?

Thanks.

thx sifu for explaining.. so now days housing project abandon half way, possibility shud be zero? many years ago many projects were stopped half way, why so?

still possible now. reason is because the developer no money to finance the job. say this project building cost 100mil and it have 200 units with 600k each unit which can sell 120 million. usually when certain amount of unit sold then they will start the project. say at the middle of project progressively it hit 50 million (progress 50%) while sales only hit 70 million, bank will release 70 million times progress 50% which is 35 million. if developer no cash then gg already. no money finance and need to declare insolvency. simple explanation.

that's why I asked if developer got support from bank to finish thier project if need arises fr ur example given.

If I am bank(s), developer come to me to borrow money for his project...I say ok u must sell this % unit before I support u to start building...sure dev wont start building if sell less than certain %...after hit target construction begin...those are most critical time when bank support needed most......if calculate correctly when sales target hit, dev shud not run out of money right...with bank support.?

bank will not support developer. bank pay developer because the purchaser borrow money from bank for the unit they purchase. bank just release the money purchaser borrow to developer base on the progress % certified by architect.

so if fully sold then developer shouldn't have any issue. unless they have design issue, need to redesign and redo then that is other issue. cost overrun.

K, thx for ur explanation. U see I paid a booking fee for a low dense condo which is building in progress. It is a bumi rel unit, I no need to sign spa yet only after 80% completion then they will apply for conversion n spa follow. It is small time developer, first time building condo. I was attracted by the red clay bricks used in construction. To not cost overrun why they using red bricks?, brochure pun mentioned cement brick only.. luckily building is almost completed at roof now, 17 floors total. 144 units some 90+% sold, not sure true or not. I oso ask bro n sis consider buying but not sure if this is right decision bcos what if project stop next year I ll kena blame..

that's good deal I guess. well, this can't be blame. cOz nobody can predict the future. u can't guaranty ur next iPhone 7 won't explode what

nowadays there are software available in market to build up a model for costing only. the software can measure in very high accuracy and it ensure that a contractor can tender for the project accurately without worry abt over pricing (not competitive price and hence cannot get the project) or underpricing (rugi when get the job)

those software can set the rule like here in malaysia use SMM2 so can price that in a correct standard manner.

some software like Glodon cost quite a lot. maybe abt 100k for a year subscription

any other alternative?

You are talking about end financing above.

But aside from end financing, don't banks provide project financing to developers also?

You're talking out of partial ignorance.

Where got developer "will only start a project when they can use rm1000 to make rm20000"? That kind of profit ratio does not apply.

What are you talking about curing time for bricks? Curing time is for cement, for bricks you need to refer to firing time. And even if diesel price goes up, the brick maker won't reduce from 1 hour to 5 minutes. That is pure exaggeration on your part.

Roof tiles - if your building spec already mentions roof tiles then it's not so easy to just switch to "industrial zinc".

nope. bank won't lend money to developer unless developer pledge their asset to bank.

eg developer want money how? they need to charge their land or property to get the loan. bank need security to lend u money.

Are you sure the years can be changed? I thought generally all the developers SPA must follow either Schedule G or H of the Act.

Of course the bank must have some collateral. So, if the developer is willing to charge land/property to secure the loan they can get project financing right?

depend on the asset value. they can't get 100 million if their asset worth 50 million

amendment can be done. but at the end the buyer need to accepted the amendment also. certain project might need longer duration due to complexity or higher floors sometimes

Of course la, all the borrowers know that. The bank's lending margin is probably only 50-60% of the asset value.

what I wanna say is developer can get loan from bank. that's just normal corporate loan. nothing to do v project.

clay brick expensive due to fuel cost
cement sand brick cheap

nowadays also have block. light weight block and no plaster require. straight away skim coat. light weight reduce the labor cost too. cost saving

got competition. so many supplier out there. so if 1 company wanna make more profit they might end up losing the deal.