Perak is conducting a comprehensive study on mandating the build-then-sell concept for new housing projects to reduce abandoned project risks.
IPOH: The Perak government is conducting a comprehensive study before mandating the ‘build-then-sell’ concept for new housing projects.
State Housing and Local Government Committee chairman Sandrea Ng Shy Ching said engagement sessions with relevant parties are underway to reduce the risk of buyers being affected by sick or abandoned developments.
She identified several factors requiring in-depth study, including the financial strength of developers, particularly small and medium-scale companies.
“The BTS concept requires a much larger initial capital,” she said during the Perak State Assembly sitting.
Ng added that there is a risk of house prices increasing if developers transfer upfront financing costs to consumers.
Concerns also exist over the readiness of the industry chain, including bank financing, regulations and necessary incentives.
Considerations must include the concept’s suitability with Perak’s housing market, such as demand and the financial ability of the people.
As part of initial preparations, Perak has held several rounds of engagements with developers, financial institutions and property associations.
These efforts include obtaining feedback on needs, challenges and suitable financial models.
The state is also conducting internal studies on successful BTS models implemented in other states.
“This effort is important to ensure that if the federal government decides to implement BTS more broadly, Perak will be in a state of readiness,” Ng said.
She was responding to a question from Steven Chaw Kam Foon (PH-Menglembu) about state plans for the build-then-sell concept.
