Share
The launch of Malaysia’s National Housing Policy (NHP) 2026–2035 has generated fresh optimism among aspiring homeowners, industry players and policymakers.
Housing and Local Government Minister Nga Kor Ming has set an ambitious direction: to improve housing affordability while addressing one of the sector’s most persistent problems — delayed and abandoned housing projects. The policy framework includes a target of zero abandoned housing projects by 2030, alongside data, monitoring and regulatory initiatives.
These include the Housing Integrated Management System, the Transforming and Empowering Data Usage in Housing (TEDUH) portal, the electronic sale and purchase agreement (eSPA), and scheduled audits intended to improve project monitoring and oversight.
The objective deserves support. Purchasers affected by abandoned projects can face severe hardship, servicing housing loans for homes that remain incomplete while also paying for alternative accommodation.
The minister’s commitment is therefore welcome. But good intentions and new platforms alone cannot resolve structural weaknesses in the housing delivery system.
The more important question is whether Malaysia can realistically achieve zero abandoned housing projects by 2030 without a credible transition from sell-then-build (STB) towards build-then-sell (BTS).
A blueprint needs implementation
On April 28, 2023, I wrote an article titled National Housing Policy — A Great Blueprint Awaiting Implementation. My central concern was not the quality of the policy, but whether its recommendations would be carried through.
Three years later, that concern remains.
Malaysia has not lacked housing policies, plans or transformation programmes. Successive administrations have promised improved affordability, governance and consumer protection. Yet problematic and abandoned projects continue to arise.
The NHP should therefore be judged not by the number of portals launched or announcements made, but by whether it addresses the causes of project failure before purchasers suffer the consequences.
Technology is an enabler
The ministry’s digital initiatives are a constructive step. Better information systems can improve coordination among regulators, widen public access to housing information, modernise documentation and support more effective supervision.
But technology cannot substitute for sound project financing, competent management or timely enforcement.
Digital systems can flag warning signs and improve regulators’ ability to intervene. They cannot, by themselves, ensure that a developer has sufficient financial capacity to complete a project. Nor do they alter the basic exposure faced by purchasers who enter into SPAs and make progressive payments before receiving vacant possession.
Technology should be treated as an important administrative tool, not as the primary solution.
The STB question
Malaysia continues to rely predominantly on STB, under which properties are marketed before construction is completed, purchasers enter into SPAs, and make progressive payments in accordance with construction stages.
This structure can leave purchasers exposed when a project encounters serious financial, operational or delivery problems. They may have committed to loans and contractual obligations long before receiving a completed home.
No monitoring platform fundamentally changes that allocation of risk.
Public policy should place greater weight on prevention rather than intervention after a project has already become distressed or abandoned. This is where BTS warrants serious consideration.
Under BTS, the developer bears a larger share of delivery risk before receiving the bulk of the purchase price. Under the BTS 10:90 model, purchasers pay 10% upon signing the SPA, while the remaining 90% is payable upon delivery of vacant possession under the relevant statutory framework.
Under the absolute BTS 0:100 model, the property is completed before the purchaser pays the purchase price.
BTS does not eliminate every risk in the housing market. But it can reduce purchasers’ exposure to construction-stage failure and place greater responsibility on parties undertaking and financing development.
Malaysia has discussed BTS 10:90 and BTS 0:100 for years. The issue is no longer whether the concept has merit, but whether the government is prepared to establish a practical, phased pathway for wider adoption.
Read also:
Property Chat: BTS 10:90 is not BTS
Consumer protection and enforcement
The case for reform is not solely economic. It is also about consumer protection.
The Federal Court has described the Housing Development (Control and Licensing) Act 1966 and its subsidiary legislation as social legislation intended to safeguard house buyers, who are generally the weaker party in their relationship with developers. The court has emphasised a purposive approach that gives meaningful effect to that protective purpose.
That principle should inform future housing reform. If consumer protection is central to housing law, the delivery system should also seek to reduce the financial risk borne by purchasers when projects fail.
BTS alone, however, will not solve everything. Effective enforcement remains indispensable.
The existing statutory regime provides licensing, regulatory and enforcement mechanisms. The issue is whether potential breaches are investigated promptly and whether appropriate action is taken consistently.
Developers that knowingly breach statutory obligations should face meaningful consequences. Where the law and evidence justify it, enforcement should also extend to responsible officers or directors.
Greater transparency would strengthen confidence. The ministry should publish annual figures on investigations, prosecutions, convictions, penalties and the outcomes of intervention in troubled projects.
A phased transition
The principal objection to mandatory BTS is that it could raise developers’ financing and holding costs. That concern should not be dismissed.
A poorly managed transition could affect project viability, housing supply and prices, especially for smaller developers with limited access to capital. This is precisely why reform must be phased, evidence-based and supported by appropriate financing arrangements.
Financially capable developers could be brought into a wider BTS regime first, allowing regulators, banks and the industry to identify operational issues before extending the model more broadly. The government has previously indicated that it is considering a phased STB-to-BTS transition as part of efforts to prevent abandoned projects.
Malaysia need not copy another jurisdiction wholesale. Singapore and Australian states use different combinations of licensing, financial, contractual and purchaser-protection safeguards. The relevant lesson is simpler: developers should demonstrate the financial and technical capacity to deliver what they sell, while purchasers should have meaningful protection when things go wrong.
If the government is serious about eliminating abandoned housing projects by 2030, several measures deserve consideration:
1) Establish a clear timetable for a phased transition towards BTS, beginning with financially capable developers and appropriate project categories.
2) Strengthen licensing requirements so developers demonstrate adequate financial capacity and technical competence before undertaking projects.
3) Enforce statutory obligations consistently, including against responsible parties where the legal and evidential basis exists.
4) Consider an independent project review and monitoring body involving the ministry, financial institutions, professional bodies, consumer organisations and relevant agencies to identify distressed projects early.
5) Publish annual NHP report cards covering project completion, sick and abandoned projects, enforcement action and purchaser outcomes.
6) Maintain meaningful engagement with consumer organisations, which have long experience assisting purchasers affected by troubled developments.
The target of zero abandoned housing projects by 2030 is worthy. But history shows that ambitions alone do not reform a sector.
Digitalisation, improved monitoring and scheduled audits can strengthen the system. They cannot remove every structural risk inherent in the way homes are financed and delivered.
A carefully managed shift from STB towards BTS would not be merely an administrative adjustment. It would move more delivery risk away from purchasers and towards those developing and financing projects.
The success of the NHP will ultimately not be measured by the number of portals created, digital systems launched or policy papers published. It will be measured by whether Malaysians can buy homes with greater confidence that those homes will be completed and delivered.
That is the true test of meaningful housing reform.
This article is written by Datuk Chang Kim Loong, honorary secretary-general of the National House Buyers Association (HBA). HBA is a voluntary non-governmental and not-for-profit organisation manned wholly by volunteers.
HBA can be contacted at:
Email: [email protected]
Website: www.hba.org.my
Tel: +6012 334 5676
The views expressed are the writer’s and do not necessarily reflect EdgeProp’s.
..........
EdgeProp monthly brings you data, insights and solutions for an evolving market. Subscribe now for your free copy!
