Build-then-sell housing delivery system to heal 'sick' projects, says Nga

KUALA LUMPUR (Oct 27): The Ministry of Local Government Development plans to implement a build-then-sell housing delivery system, rather than a sell-then-build delivery system, next year to reduce the number of "sick'' or delayed housing projects.

Minister Nga Kor Ming said the ministry will work together with the Real Estate Housing Development Association (Rehda) to overcome the issue.

"I will discuss with Rehda about the new business model, so that developers build new houses and sell them.

''This is so that there will be no more abandoned projects in the future, as you are only allowed to sell upon completion," he told the media after launching the Malaysia Property Expo (MAPEX) 2023 here on Friday.

Nga said the ministry's special task force had revived 256 projects worth RM23.37 billion as at August.

"We managed to save a total of 28,863 buyers, and we want to make sure there are no more abandoned projects,'' he said, adding that 9,500 affordable housing units are on track to be completed under the 1Malaysia Housing Programme (PR1MA) this year.

Nga said that to date, 17 out of 24 sick housing projects under his scrutiny had been restored.

MAPEX 2023, which runs until Oct 29 at the Mid Valley Exhibition Centre, is participated by 44 exhibitors comprising developers, financial institutions and government agencies.

Meanwhile, the ministry will be joining hands with Rehda to co-organise MAPEX 2024, in a mission to further boost the country's property sector.

https://theedgemalaysia.com/node/687958

I applaud this, but remains to be seen if there's any follow through.

haha all feature buyer need to buy expansive property already. As developer need to bear higher risk and more uncertainty.

For example, project very high density like m vertica & razak city will be easy to sell before built, but once it built then people saw the project very high dense then will lose interested, so the project like this will be harder to sell at this scheme.

Build-then-sell : small scale developers can only build 2-4 blocks at a time.

Mid scale developers maybe 2x capacity of small. So expect every phase to increase by 15-20%.

And undertable sum of 30-50k, if u don't want to queue for 3 days + 3 nights.

Le nouvel klcc is one of the existing build then sell projects. The price increasing after the project completed & not selling well, until now only 35% sold.

You mean those early birds are duped.

As if buyers need not pay loan interest. if le nouvel lower the price, see can sell or not.


This post has been edited by icemanfx: Oct 27 2023, 11:51 PM

This new scheme is proposed by the same minister who rejoiced over RM150mil budget for toilet refurbishment and tried to take credit for Lynas' initial announcement to cease operation in Malaysia but ultimately he was humiliated big time when the rare earth processing plant's license got renewed with lax conditions

Dupe or not are depend on how sale person present the project. Those high dense project will never showed whole project scale model at once. Sell block a, block a model up, sell block b, removed block a, and put block B up, continue with all block. But under this scheme built then sell, the real condo is there, people can see the project already, how developer hide the dense?

I don't think it's an issue, people having issue will never have bought in the first place, right? Plus higher density developments already provide an incentive to buyers, i.e. cheaper cost and lower maintenence fees.

Yeah, like you said, cheap and good location. But this is 5600+- unit. With 380k+-

Rumahwip? 500 unit +- with 300k.for sure we can't compare to government subsidise project, but the density itself already anxiety a lot people.

So at sale of view, rc all good, then only problem is density. So settle density = get sale. Then all the company, developer, sale agency more than 100 people brainstorming to design convincing skill and closing skill just to deal with a purchaser.

Scale model tactic is just a most simple, there are a lot tactic you don't know.

But if built to sale, not more hidden information, so I predict this kind of product will be less under the this scheme

If built then sell, there would be a huge down payment needed right? Nowadays youngster where got money to dump in.

Been hearing this years before.

Either way still need down payment ma. Just that developers inflate the price 10% then give it back to customers as a rebate which means no down payment needed. Of course this is wrong but do the bankers cares. They all turn a blind eye to this. Panel bankers know for sure.

Yes down payment needed. It's all about the valuation. If the valuation cannot fit the property price, more downpayment needed. Of course developer will adjust the package to overcome the problem but this will also come.out with another problem. If developer rushing to sell, they will actually aiming for bulk purchase group. As they want clear stock faster and get back the cost.

A lot unsold completed highrise project (right now) are actually corporate with bulk purchase group. So under this scheme I can see its a new heaven for bulk purchase group business.

Don’t build anymore will settle everything . Enough for them to earn so many many many decades . We already have tonssssss of Subsales floating in d market

But I think the problem is the amount of down payment needed for built then sell and sell then built is totally different. If built then sell, down payment needed is around 20% of the property plus whatever legal fees while sell then built is just some upfront payment which is like few thousand. Please correct me if I'm wrong, am just a rookie.

A build-then-sell concept may not always help. Today there are so many unsold units in several locations, available for sale immediately but yet people would rather queue and book a newly launching project so that they can be the first to choose their preferred floor, preferred side etc.

Even if in future, the government imposes a build-then-sell concept, I won't be surprised if there will be buyers who will pay in advance to book their preferred unit.

Substantial risk for this model when everyone else is doing pre-sales? Didn’t Sapphire Paradigm use this model? With a PJ address and next to a mall still can’t finish selling it’s an issue.

Build the sell is meant to have developers to carry incompletion risks and to protect home buyers but many here are more keen to protect developers interest.

Totally agree, this is a weird phenomena.

i think Unsold Ready unit was facing few challenge,
1. sub-sale selling price < developer unsold unit price (as it markup legal stamping and mot)
2. Auction unit available at market
3. Huge competition at market new product design smaller size but competitive price. In the end, price is the first consideration for the market.