The Star : 6 October 2006�

Weak market conditions and tightening of loans by banks has caused house sales to drop, according to the Real Estate and Housing Developers Association Malaysia (Rehda). �

A recent survey by Rehda on the property market showed that amajority of the 1,100 members surveyed reported unsold housing units.

Rehda deputy president Datuk Michael Yam said while most developers� unsold stock levels were still manageable, the industry was facing major challenges.�

�The cost of building materials has escalated in the wake of fuel price increases, and with pricing pressures intensifying, costs are fluctuating rapidly, resulting in uncertain supply,� he told a media briefing here yesterday.�

Yam said the increasing pressure of regulatory compliance costs, such as low-cost quota policy, bumiputra quota and discount policy, and �build-then-sell� (BTS) or 10:90 policy were cramping development. �

�In order for the BTS policy to succeed, financial institutions have to play a major role in ensuring that financing for housing projects is adequate and forthcoming,� he said.�

�The BTS policy requires house buyers to pay a 10% down payment, with the remainder to be settled upon the completion of the house, putting developers at a dangerous disadvantage.�

�A proper legislation framework is needed to prevent buyers from backing out on sales and purchase agreements halfway through a project, which could lead to it being abandoned.� �

He added that buyers, too, must protect themselves from being cheated by unscrupulous developers. �

Weakening demand and quality issues had also become a concern to industry players, said Yam. �

However, there are pockets of optimism indicated by better sales in certain areas of Selangor, Johor, Malacca, Perak and Penang, according to the survey.�

�It is all about location. A developer is also a businessman who must make wise decisions in encouraging better reception from buyers,� said Yam, who is also managing director of Sunway Bhd. �

In the light of the challenges, Rehda is determined to boost the industry by focusing on three key areas � mitigating the cost of doing business, strengthening demand, and continuing professional development of human resources.�

�This will bring about a level of competency and quality expected by the public. Only then will our industry be able to compete with the world,� he said.�