KUCHING: Sarawak must keep the sell-then-build housing model as it keeps homes affordable, safeguards buyers and allows smaller developers to compete, said SHEDA advisor Datuk Sim Kiang Chiok.
He was commenting on the federal government’s plan to amend the Housing Development Act 1966 to make the build-then-sell system mandatory, replacing the current practice that lets developers sell units before construction is completed.
He said the sell-then-build model had enabled millions of Malaysians to own homes at lower entry costs compared to countries that require developers to complete projects before sales.
He explained that its strength lies in the tripartite relationship between developers, purchasers and banks, which spreads risk fairly across all three parties.
“In Sarawak, purchasers are protected under the Housing Development (Control and Licensing) Ordinance 2013, while in Peninsular Malaysia similar protection is provided under the Housing Development Act.
“These laws ensure developers are licensed, housing contracts are standardised and funds are monitored through the Housing Development Account,” he said.
According to him, the model also encourages smaller players to enter the market as they do not need to raise full project capital upfront.
“This keeps competition healthy, helps stabilise prices and maintains housing affordability.”
By contrast, he pointed out that the build-then-sell approach places almost all the risk on developers, meaning only large companies with strong capital would be able to participate.
“With fewer suppliers, competition will shrink and prices will inevitably rise, hurting first-time buyers most,” he said.
He also highlighted Sarawak’s specific circumstances, noting that the state is still developing and continues to see strong housing demand from population growth and rural-to-urban migration.
“Forcing a build-then-sell system now would slow down development and worsen the supply-demand gap at a time when Sarawakians need more homes, not fewer,” he said.
Sim added that the focus should be on strengthening the existing framework through stricter enforcement against errant developers and greater consumer awareness, rather than dismantling a system that supports affordability and wider participation.
“The sell-then-build system, backed by law, banks and healthy competition, remains the most practical and sustainable choice for Sarawak,” he said.
