KPKT TO ANNOUNCE FIVE HOUSING INDUSTRY REFORMS NEXT MONTH

KUALA LUMPUR, Oct 30 (Bernama) -- The Ministry of Housing and Local Government (KPKT) will announce five housing industry reform measures on Nov 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, as well as to enhance homebuyer rights protection.

He said KPKT has outlined an action plan to ensure a phased transition from the "Sell Then Build" (STB) concept to a "Build Then Sell" (BTS) model.

"The government strongly advocates for the BTS method in private housing development, as it significantly reduces the risk of abandoned projects and the oversupply of unsold units.

"Under the 10:90 BTS scheme for private housing, developers will require a 10 percent down payment from the buyer. The remaining 90 per cent is only payable upon the home's completion, once the Certificate of Completion and Compliance is issued and Vacant Possession is delivered," he said during a question-and-answer session in the Dewan Rakyat today.

Nga was responding to a question from Pang Hok Liong (PH-Labis), who asked if the ministry was prepared to make the BTS scheme mandatory nationwide to reduce abandoned housing projects, particularly condominiums, and protect buyers.

He explained that the government is only encouraging developers to adopt the scheme voluntarily due to risks that could adversely affect buyers and stakeholders across the supply chain who may not have the capacity to meet the National Housing Department requirements.

Nga stressed that undertaking a BTS project requires a developer to have a very strong financial capacity.

To advance this effort, he said KPKT is currently drafting amendments to the Housing Development (Control and Licensing) Act 1966 (Act 118), to safeguard the rights and interests of all parties involved in housing development, and to prevent abandoned projects.

“The proposed amendments aim to empower efficient governance and financial management in housing development, ensure the rights and interests of homebuyers are protected, and facilitate a shift in the private housing sector towards greater sustainability,” he said.

Nga also reported that, to date, the Abandoned Private Housing Projects Taskforce has successfully revived 1,600 projects involving 163,000 homebuyers nationwide.

"This achievement stems from our efforts in identification, resolution, prevention, and by proposing new models for the future," he said in response to a supplementary question from Pang on the best model to protect both buyers and developers.

He added that KPKT is strengthening regulation through existing procedures under the Housing Development Account, which all licensed private developers in Peninsular Malaysia are required to open.

"All developers must pay a deposit of three percent of the project's Gross Development Value (GDV). For example, if the GDV is RM1 billion, they must deposit RM30 million into the account to ensure sufficient cash flow to meet the project's requirements and implementation," he said.

-- BERNAMA