The Feasibility Study of Adopting Build then Sell (BTS) System in Building Compact Houses

Lin, Mei Yan (2018) The Feasibility Study of Adopting Build then Sell (BTS) System in Building Compact Houses. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

The Sell then Build (STB) housing delivery system has long been used in Malaysia. This system has been implemented successfully and delivered over 70% of the total target housing units for the nation. However, there are issues of abandoned housing projects, late delivery and shoddy workmanship arising from this system. This is why Build then Sell (BTS) system has been introduced by the Malaysia government to protect the home buyers. According to the research by several researchers, the demand for BTS houses in Malaysia is very high. Even though the BTS system is the norm in other developed countries, it is a still very foreign idea in Malaysia. Many developers are unwilling to adopt this BTS system even though the government provides incentives to the developers who adopt the BTS system. The main reason of the unwillingness of the developers to adopt BTS system is finance. This paper aims to analyse the risks on adopting BTS system in building compacted houses, to investigate the willingness of the financial institutions to provide financial support to developers to implement the development of compacted houses and to identify the feasibility of the BTS system for compacted houses. To accomplish this goal, semi-structured personal interview is conducted with the developers from public listed companies and small scale developers. Additionally, the experienced bankers are also invited to participate. The data collected from the interviews is interpreted to meet the objectives of this study. The findings of this research is the risk on adopting BTS system, in building compact houses is reduced compared to building the normal houses. Besides, the financial institutions are willing to provide the financial support to the developers no matter which housing delivery system the developers used, provided that the developers fulfilled the requirement of the financial institution’s policies. Last but not least, the developers and xi the financial institutions are in the opinion that adopting the BTS system in building the compact houses is feasible, so long as it is marketable and geographically. All in all, this research is able to provide a guideline to the developers by using this BTS system on only building the compact houses. This provide a great contribution to the society as it has been deem as feasible to the parties involved. However, the developers and the financial institution needs to take time to evaluate and investigate the true market condition as well as obtained the suitable location only then decide whether to build or not. Future research such as having a research by getting the real market demand on the particular location to provide the developers a guideline as to which location have better potential for development.