Build-Then-Sell: A Safer Future for Malaysia’s Homebuyers?
Malaysia’s property market may be on the brink of a major transformation. Under the 13th Malaysia Plan (13MP), the government has proposed to make the Build-Then-Sell (BTS) model mandatory—signaling a bold shift in how homes are sold and delivered.
This long-awaited policy aims to better protect homebuyers, address the persistent issue of abandoned housing projects, and bring accountability back to the forefront of real estate development. If approved, this change could reshape the property development landscape across Malaysia—including the highly active kl property sector.
What Is the BTS 10:90 Scheme?
The BTS 10:90 model is not new. Introduced in 2007 under the Housing Development Act (HDA), it allows buyers to pay just 10% upfront, with the remaining 90% only due upon completion and delivery of the property. However, it has never been made mandatory, and developers have continued to favour the Sell-Then-Build (STB) model instead.
Under STB, buyers are required to make progressive payments during construction, sometimes as early as the pre-launch stage. While this has helped developers with cash flow, it has also resulted in a troubling number of abandoned or delayed housing projects—leaving buyers financially trapped with half-completed homes and unpaid loans.
With the new proposal, the government is looking to amend the HDA to compel developers to adopt the BTS system, eliminating the risks that come with premature payments and shifting the development burden back onto the developers.
Why Developers Have Resisted BTS
The STB model has long benefited developers, allowing them to fund projects using buyer payments collected during various construction phases. But under BTS, they would have to shoulder the full financial burden upfront—either through internal funding or external financing—before seeing any return from buyers.
This is expected to raise debt levels and strain the finances of developers without deep pockets or strong balance sheets. According to industry analysts, only the financially robust players will be able to survive in a fully BTS-regulated environment. This could lead to industry consolidation, with smaller, less-capitalized firms exiting the market or merging with stronger players.
TA Securities anticipates that the government may roll out the BTS mandate in phases, potentially offering exemptions or transitional support to smaller developers to ensure a balanced implementation that protects both buyers and industry viability.
How BTS Could Affect Home Supply and Prices
While the BTS model enhances buyer protection, there are concerns that it may lead to fewer project launches in the short term. Developers facing higher financing requirements may delay or cancel launches, particularly in the mass-market housing segment where margins are tighter.
This potential slowdown in housing supply could contribute to price increases, especially in high-demand areas such as Klang Valley, where affordability is already a pressing issue. However, this may also discourage the speculative overbuilding that has led to Malaysia’s oversupply of unsold units in recent years.
Maybank Investment Research notes that BTS encourages more thoughtful planning, aligns development with genuine demand, and improves construction quality—making the housing market healthier over the long term.
A Welcome Move for Buyers—and Banks
The National House Buyers Association (HBA), which has been championing the BTS model for over two decades, welcomes the announcement but remains cautious. Its secretary-general, Datuk Chang Kim Loong, emphasized that the initiative must not remain mere lip service.
He stated that full implementation of BTS 10:90 would “drastically, if not totally, eliminate cases of abandonment.” It would also reduce the financial burden on banks and government agencies, which are often left to deal with the fallout from failed housing projects.
Indeed, the devastating consequences of abandoned housing impact more than just buyers. Banks are left with unrecoverable loans, and public funds are often needed to rehabilitate or manage failed developments—highlighting the urgent need for structural reform in how homes are built and sold.
What This Means for KL Property Buyers and Investors
For those investing or purchasing in the kl property market, the BTS mandate could bring both security and limitations. On one hand, buyers can be confident they are only paying for fully completed homes, minimizing risk. On the other, the supply of new properties—especially affordable ones—may shrink in the short term.
Investors and homeowners may also see price appreciation as developers scale back risk and prioritise quality over quantity. Projects that do move forward under BTS are likely to be better planned, responsibly funded, and tailored to market demand, boosting long-term value.
Buyers looking to enter the KL property market would do well to monitor which developers are early adopters of the BTS approach. These firms are more likely to deliver on promises, stay compliant with future regulations, and maintain a reputation for integrity in an evolving market.
Final Thoughts: A Turning Point for Malaysia’s Housing Sector
Mandating the BTS 10:90 model could be the most transformative housing policy in decades, placing the safety and interests of buyers at the centre of the development process. While the transition may challenge some developers and constrain short-term supply, it also promises a stronger, more resilient housing market for the future.
As with any major reform, the key will be balanced implementation, clear regulation, and firm political will. If done right, it could bring Malaysia’s property sector in line with global best practices—benefiting buyers, banks, developers, and the broader economy alike.
