KUALA LUMPUR: Malaysia's long-debated Build-Then-Sell (BTS) model could offer a solution to the country's persistent abandoned housing crisis, but developers have remained reluctant to adopt a system that would require them to bear greater upfront financial risks.

As of June 30, Malaysia had 303 private housing projects classified as "sick" projects, involving 43,288 housing units with a gross development value (GDV) of RM40.25 billion.

The Ministry of Housing and Local Government (KPKT), in a written reply published on the Parliament website, said 100 projects had been confirmed as abandoned, affecting 27,998 housing units and 14,961 buyers.

Selangor recorded the highest number of abandoned projects with 41, followed by Kelantan with 13 and Terengganu with 11.

The figures highlight the scale of the challenge facing Malaysia as the government seeks to address one of the country's most persistent housing problems – uncompleted homes that leave buyers financially burdened for years.

The launch of the National Housing Policy (NHP) 2026–2036 has renewed hopes among homebuyers, industry players and policymakers that Malaysia can finally resolve the issue of delayed and abandoned housing projects.

Housing and Local Government Minister Nga Kor Ming has set a target of achieving zero abandoned housing projects by 2030, supported by initiatives including the Housing Integrated Management System, the Transforming and Empowering Data Usage in Housing (TEDUH) portal, the Electronic Sale and Purchase Agreement (eSPA) and stronger project monitoring.

However, the National House Buyers Association (HBA) said improving monitoring alone may not be enough unless Malaysia addresses the structural weakness in its housing delivery system.

HBA honorary secretary-general Datuk Chang Kim Loong said thousands of buyers have suffered financial hardship over decades, with many forced to continue servicing housing loans for unfinished homes while paying rent for alternative accommodation.

"The Minister's commitment is therefore both welcome and commendable. However, noble intentions alone cannot overcome structural weaknesses," said Chang.

He questioned whether Malaysia could realistically achieve zero abandoned housing projects by 2030 without shifting away from the current Sell-Then-Build (STB) model towards BTS.

"Malaysia has never lacked housing policies. Every administration has introduced comprehensive plans, transformation programmes and strategic blueprints promising greater affordability, better governance and stronger consumer protection.

"Yet abandoned projects continue to occur. This demonstrates an uncomfortable truth. Malaysia's housing problem is not a shortage of policies. It is a shortage of implementation," Chang said.

STB shifts risks to buyers.

"The National Housing Policy 2026–2036 offers the government another opportunity to demonstrate that this time is different. If the government truly believes that every Malaysian deserves a safe and secure home, then it must also ensure that every Malaysian is protected from financing risks beyond his or her control," Chang said.

Chang said the STB model remains the fundamental weakness behind the recurring issue.

Under the current system, developers sell properties before completion, while buyers sign Sale and Purchase Agreements and banks release loans progressively based on construction progress.

This means purchasers effectively finance housing projects before receiving completed homes, exposing them to significant risks if developers face financial difficulties.

When projects run into funding problems, construction may slow, developments can become distressed and some may eventually be abandoned. Yet buyers remain responsible for loan repayments on homes that have not been delivered.

"No amount of digital monitoring can change this fundamental allocation of risk," Chang said.

He argued that government efforts should focus on preventing abandoned projects rather than managing their consequences after buyers have already suffered.

BTS shifts risk back to developers.

According to Chang, the most effective preventive measure is the BTS model, where developers must complete substantial construction before receiving payment from purchasers.

"Prevention through BTS is far more effective than attempting to manage the consequences of sell-then-build," Chang said.

Under BTS, buyers purchase completed homes rather than promises, while development risks remain with developers who are better positioned to manage financing, construction and market risks.

"This encourages stronger financial discipline, discourages speculative developments and enhances public confidence," Chang said.

He added that Malaysia has discussed both the BTS 10:90 model and the more comprehensive BTS 0:100 model for years, with successive governments acknowledging their benefits, but implementation has remained elusive.

"If previous governments accepted BTS in principle but never implemented it, why should Malaysians believe that the latest National Housing Policy will finally deliver a different outcome while continuing to rely on the same STB framework?"

"BTS rewards responsible developers. It enhances market confidence. It improves industry credibility. Most importantly, it restores public trust. An industry respected for delivering completed homes will ultimately enjoy stronger and more sustainable long-term demand," Chang said.

Learning From Global Practices

Chang said Malaysia should also learn from international housing systems that place greater emphasis on protecting buyers and ensuring developers carry appropriate risks.

Countries such as Singapore have introduced strict licensing requirements, financial safeguards and regulatory oversight for developers, while Australia and several European jurisdictions have adopted stronger purchaser protection mechanisms and financing controls.

While no housing system is without challenges, Chang said the underlying principle is clear: development risks should primarily remain with developers rather than ordinary homebuyers.

"Malaysia should not hesitate to adopt international best practices where they provide better consumer protection," Chang said.

What Must the Government Do?

Chang said if the government sincerely intends to eliminate abandoned housing projects by 2030, several practical reforms deserve urgent consideration.

"Firstly, establish a clear timetable for progressively implementing mandatory BTS beginning with financially capable developers before extending it industry-wide.

"Secondly, tighten licensing requirements to ensure only developers possessing adequate financial strength and technical competence receive development licences.

"Thirdly, strengthen enforcement by prosecuting developers and company directors who repeatedly disregard statutory obligations.

"Fourthly, establish an Independent Housing Project Review and Monitoring Commission comprising representatives from the Ministry, financial institutions, professional bodies, consumer associations and the Attorney General's Chambers to identify troubled projects before they become abandoned.

"Fifthly, publish annual report cards measuring the National Housing Policy's performance using transparent indicators such as project completion rates, abandoned projects, enforcement actions and purchaser satisfaction.

"Finally, engage continuously with consumer organisations."

Chang said they possess decades of practical experience assisting victims of abandoned housing projects and can provide valuable policy feedback.

He said the transition from STB to BTS is not merely an administrative adjustment but a fundamental shift in philosophy, from asking house buyers to finance developers to requiring developers to earn purchasers' trust by delivering completed homes.

"Only then will Malaysia genuinely honour the spirit of the Housing Development (Control and Licensing) Act as social legislation. Only then will house buyers receive the protection Parliament intended. And only then can the government confidently assure Malaysians that the era of abandoned housing projects has finally come to an end.

"Until that day arrives, the promise of "zero abandoned housing projects by 2030" will remain an aspiration rather than a guarantee," Chang said.