Kuala lumpur: The Ministry of Housing and Local Government (KPKT) is set to announce five housing industry reform measures on November 20, targeting the elimination of abandoned private housing projects by the year 2030. Minister Nga Kor Ming highlighted that these reforms are integral to a comprehensive plan focused on strengthening governance and financial management within the housing sector, alongside enhancing protection for homebuyers’ rights.
According to BERNAMA News Agency, the KPKT has devised an action plan to transition gradually from the current “Sell Then Build” (STB) approach to a “Build Then Sell” (BTS) model. Minister Nga emphasized that the government advocates for the BTS method in private housing development due to its potential to significantly reduce the risk of abandoned projects and oversupply of unsold units. Under the 10:90 BTS scheme, developers would require a 10 percent down payment from buyers, with the remaining 90 percent payable upon completion and issuance of the Certificate of Completion and Compliance.
Nga addressed a query from Pang Hok Liong (PH-Labis) regarding the potential nationwide implementation of the BTS scheme to reduce abandoned projects and safeguard buyers. He noted that while the government is encouraging voluntary adoption of the scheme, it is not mandatory due to potential risks affecting buyers and stakeholders who may struggle to meet the National Housing Department requirements. Nga stressed that developers undertaking BTS projects must possess strong financial capacity.
To support this initiative, KPKT is drafting amendments to the Housing Development (Control and Licensing) Act 1966 (Act 118). These amendments aim to empower efficient governance and financial management in housing development, protect homebuyers’ rights, and promote sustainability in the private housing sector.
Nga also mentioned that the Abandoned Private Housing Projects Taskforce has successfully revived 1,600 projects, benefiting 163,000 homebuyers nationwide. This success is attributed to efforts in identification, resolution, prevention, and proposing future models. Additionally, KPKT is enhancing regulation through existing procedures under the Housing Development Account, requiring all licensed private developers in Peninsular Malaysia to deposit three percent of a project’s Gross Development Value (GDV) to ensure sufficient cash flow for project execution.