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Friday, July 30, 2010

White knights sought for idle housing projects

The government is seeking "white knights" to revive 56 abandoned housing projects while coming down hard on directors of companies and property developers out to make a fast buck from the industry.

Housing and Local Government Minister Datuk Wira Chor Chee Heung said its officers had managed to bring down the number of abandoned projects to 56 from 151 last year.

"In the process of reviving these abandoned projects, we have identified 40 developers who are willing to help revive those projects.

"Now, there are 56 projects that need to be revived, but we have yet to get the needed assistance from the willing developers," Chor told reporters at the 13th National Housing and Property Summit in Petaling Jaya, Selangor, yesterday.

He said that some developers were not really interested in helping to revive the abandoned projects as they were not money-making ventures. On the contrary, they had to fork out more money to revive them.

Taking this into account, the government is willing to top up the RM200 million fund allocated previously to revive such projects, he said.

At the same time, the ministry will be stricter in vetting applications by developers for housing developments.

"We try to weed out unscrupulous or unqualified developers who tend to make a fast buck.

"Their actions are not wanted here. The buyers tend to be the victims as they have taken loans to pay for the houses in advance. If the projects are abandoned, they will suffer," Chor said.

Although he did not have the statistics on errant developers, Chor said the ministry had blacklisted some, including company directors.These directors are not allowed to set up new companies.

On calls for the government to implement the "build first, then sell" policy, Chor said that the country had yet to reach the stage to implement it, but encouraged able developers to do so.

"When we build first, and up to a certain level, then sell, then, of course, developers will have to set aside a lot of capital outlay.

"Currently, a lot of developers in this country can only continue development under the current system of acquiring funding from end-financiers.

"I suppose we are not able to emulate advanced nations such as Singapore where they build first and sell later.

"We have not reached that stage yet, but we encourage those who can afford to do that," he said.

On the 10th Malaysia Plan (2011-2015), Chor said that some 78,000 units of affordable housing had been targeted to be built.

"We are targeting to build 78,000 units although survey shows that there are currently some 95,000 families throughout the nation who have yet to own houses.

He added that there was a lot of demand for such houses in Selangor, Penang, Pahang and Kedah.

By Business Times

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