The Ministry of Housing and Local Government will introduce five reforms on Nov 20 to eliminate abandoned private housing projects by 2030.
KUALA LUMPUR: The Ministry of Housing and Local Government will announce five housing industry reform measures on November 20 to eliminate abandoned private housing projects by 2030.
Minister Nga Kor Ming said these reforms are part of a comprehensive plan to strengthen governance and financial management within the housing sector.
He stated the ministry has outlined an action plan to ensure a phased transition from the Sell Then Build concept to a Build Then Sell model.
The government strongly advocates for the Build Then Sell method in private housing development as it significantly reduces the risk of abandoned projects.
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Under the 10:90 Build Then Sell scheme for private housing, developers will require a 10% down payment from the buyer with the remaining 90% payable upon the home’s completion.
Nga was responding to a question from Pang Hok Liong who asked if the ministry was prepared to make the Build Then Sell scheme mandatory nationwide.
He explained that the government is only encouraging developers to adopt the scheme voluntarily due to potential risks affecting buyers and stakeholders across the supply chain.
Nga stressed that undertaking a Build Then Sell project requires a developer to have very strong financial capacity.
To advance this effort, he said the ministry is currently drafting amendments to the Housing Development Act 1966 to safeguard the rights and interests of all parties involved.
The proposed amendments aim to empower efficient governance and financial management in housing development while ensuring homebuyer rights are protected.
Nga also reported that the Abandoned Private Housing Projects Taskforce has successfully revived 1,600 projects involving 163,000 homebuyers nationwide.
This achievement stems from efforts in identification, resolution, prevention, and by proposing new models for the future.
He added that the ministry is strengthening regulation through existing procedures under the Housing Development Account which all licensed private developers in Peninsular Malaysia must open.
All developers must pay a deposit of 3% of the project’s Gross Development Value into the account to ensure sufficient cash flow for project implementation. – Bernama
