Empleo

BTS/ STB

BUILT THEN SELL /

SELL THEN BUILD PR1MA / PPA1M FIRST HOUSING SCHEME SOCIAL HOUSING SCHEME _FULLY FURNISHED NON-

FURNISHED GOVERNMENT QUARTERS

MISSING!!!

FIGURE 2.4 Type of tenures in Malaysia

However, there is a little studies on the pros and cons of the hybrid model from a housing developers point of view. In a traditional buy and sell, the sale normally ends after the purchase has been made and after the defects, warranty period ends, in contrast to the hybrid model in which the commitment from both parties is normally longer (Kramer, 2008). In summary, there are currently no hybrid model options in Malaysia while evidence from other countries suggests that these intermediary or hybrid tenures might contribute to financing accessibility and the affordability of semi home-ownership, in particular for lower middle-income households. Therefore, our proposed model also considers the potential of introducing intermediate tenures as part of the solution.

Based on the above problems and the housing affordability rate, the solution revisited the meaning of affordability. The solution had to provide a potential answer to the affordability problem for young starters. This means that construction costs have to be sustainable and realize the economies of scale, finance arrangements should be developed that fit with the means of young starters but will also have to consider possibilities for initially lower levels of housing consumption to increase the affordability, while promoting a fit between the preferences of the households and the quality of housing. This means that construction costs have to be sustainable and economies of scale achieved, that finance arrangements suitable for young

starters have to be developed, and that possibilities for initially lower levels of housing consumption should be considered to increase the affordability, while promoting a fit between the preferences of the households and the quality of the housing.

§ 2.4.2

Problem 2: Quality of newly built housings

Despite the high housing prices, the development of the housing industry has recently been damaged by the poor performance of contractors who deliver shoddy products (Amin, Sufian, Kader, Zubaidah, & Kassim, 2014): sub-standard and poor workmanship reduces occupants’ level of satisfaction (Fauzi, Yusof, & Abidin, 2012). The quality and workmanship of some new-built houses have always been a disheartening issue for the housing industry. The quality and workmanship issues are attributed to the nature of conventional construction, which relies fully on human skills unlike manufacturing products (Zairul & Ibrahim, 2011). Furthermore, the country is currently facing a shortage of skilled workers (C. Malaysia, 2005). Training workers, especially foreign workers, to deliver the expected results would require huge investments (Cagamas Berhad, 2013). In most cases in Malaysia, the foreign workers usually left the project upon completion with knowledge and skills they acquired along the project at the corporation’s cost (Nawi, Anuar, & Lee, 2013). In seeking solutions for skilled labour to improve the quality of building projects, the country is promoting the IBS (Industrialized Building System) to replace the conventional construction industry. Nonetheless, there is a lack of commitment by the industry’s key players to change the way they do things (Nawi, Lee, Azman, & Kamar, 2013). We have therefore identified alternatives that can transform how the public perceives the industry by exploiting the manufacturing possibilities in the housing industry.

There are also supply chain issues that hamper the present housing development. As the market is maturing, legislation and regulations continue to change in response. However, instead of assisting the industry, they have become harsh and punitive (Cagamas Berhad, 2013). The strict compliance-related regulations demotivate law- abiding industry players. The board of architects Malaysia (LAM) has issued a guideline for professional architects to certify works in respect of housing projects of the sale and purchase agreement for land and building (Schedule G). The certificate comes with sale and purchase agreement (SPA) for sub-divided buildings under Schedule H of the housing development (control and licensing) regulations 1989. The figure 2.5 shows the process that has taken place for common housing developments in Malaysia. The supply chain process involves multidisciplinary, stages, steps to fulfil the regulations imposed by the government. As shown below, a normal housing construction project can last as long as 24 months and a total of 38 and 70 months in total.

preliminary stage 1-3 months contractual stage 3- 4 months tendering stage 1-3 months construction stage 18 - 24 months delivery stage 3- 4 months M 01 M 03 M 07 M 10 M 34 M 38

FIGURE 2.5 Conventional housing development in Malaysia

At present, the current housing development involves:

1 Purchasing the land 2 Appointing consultants 3 Submitting proposals

4 Compiling and coordinating stages 5 Applying for planning permission

6 Obtaining sales & permit for advertisement. 7 Construction stage

8 Delivery & handover 9 Vacant posession 10 DLP period

During the first phase, the process involves planning and preliminary stage. The phase starts with the purchase of the land and land development processes, which fall under the Land Acquisition Act 1960. The methods of acquiring land for housing development must involve state authority (Cagamas Berhad, 2013). After the land has been purchased by the developer, the process of appointing the consultants begins. It involves many parties, including the architect, engineers, quantity surveyor, contractors and subcontractors. The developer then applies for sales and a permit to advertise the housing. At this stage, the developer starts to market the housing and accept reservations for the proposed development. The steps are not necessarily sequential but are mostly done concurrently.

In the next phase, prior to the construction, the process involves designing,

modifications, tendering and awarding contracts. The construction of a typical mass housing project takes around 18–24 months. The construction will be handed over to the customer when the certificates of completion and compliance have been

issued to the developer. At this stage, several steps are involved, including testing and commissioning, checking and inspection, and the beginning of defects and liability period upon the vacant possession period. In the present situation, house buyers have to deal with some uncertainties. This is because the sales & purchase agreement is signed before the house is built. House buyers are normally given only an illustration of their future house or are shown a show house that is supposed to represent how the actual house will be. Adding to the problems, purchasers still need to make payments to the bank for the mortgage in the event the developer decides to abandon the project as a result of any difficulties.

In addition, a housing development in Malaysia is pressured to include a sustainability agenda in its development planning. The issue of sustainability is prioritized in the recent Malaysia Plan (2016–2020) under strategies for sustainable development (Economic Planning Unit, 2015). However, the challenges to providing steady development for a modern community and the desire to promote a healthy

environment have become the main setbacks especially in developing countries like Malaysia. The Construction Industry Development Board (CIDB), which is one of the country’s key construction players, has identified the need to strengthen the awareness of sustainability issues in the construction industry (Shuid, 2015). The effort towards sustainability is supported by INSPEN (the Malaysian National Institution of Valuation), MASTIC (Malaysian Science and Technology Information Centre) and several grants to public universities to promote sustainable in the new construction paradigm. Despite all efforts made by these bodies, the delivery of a sustainable concept in the housing industry is still relatively minimal and has become a low priority among contractors and housing players in Malaysia. It was reported that, in Malaysia, 10–30 percent of the waste disposed of in landfills is mainly from construction and demolition in the building industry (Papargyropoulou, Preece, Padfield, & Abdullah, 2011).

It is generally recognized that the construction industry, and especially the housing construction industry, must transform its modus operandi from linear production into making sustainability its overarching element in planning. With the current problems of global warming, resources depletion and the excessive destruction of the ecology and biodiversity, this issue has garnered some attention from industry players worldwide (Gerberich et al., 2012). However, in practice, the housing industry in Malaysia still consumes an enormous amount of raw materials, which it converts into construction materials such as cement, aggregates, steel, plastic and timber (Cagamas Berhad, 2013).

Nevertheless, the mass housing industry has not changed since it was introduced back in 1970s. As a result, more resources are exploited that caused pollution and climate change Further, the concept of sustainability is not widely accepted by the main players in the industry, partly because there are no strict regulations from the government (Abidin, Yusof, & Othman, 2013)

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