Tris Xavier, head of the integrated property practice group at Singapore legal firm Yuen Law, said developers in Singapore are required to have a minimum paid up capital depending on the number of units they have, as well as a minimum bankers’ guarantee and proof of a track record.
“To be clear, Singapore has had experiences with developers going bust,” said Xavier, citing how in 2019, developers of the Laurel Tree and Sycamore Tree projects became insolvent, leaving buyers hanging.
Laurel Tree was a condominium project at Hillview Terrace by developer Lerida while Sycamore Tree was a block in Joo Chiat with residential and commercial units by Astoria Development.
“It’s worthwhile to highlight that all purchases carry risk,” said Xavier. “However, Singapore has tried to mitigate or reduce this risk as much as possible. Other countries will have different regulations, and buyers are encouraged strongly to seek advice from lawyers and/or experts from the country they intend to buy property in.”
Johor-based analyst Samuel Tan, chief executive of boutique firm Olive Tree Property Consultants, said the Johor state government has established a special task force to resolve sick projects and, as of May 2024, nine projects had been identified for redevelopment.
The federal government also has a taskforce for sick and abandoned private developments (TFST) led by deputy minister of housing and local government Aiman Athirah Sabu.
In a recent press release, TFST said that between Jun 30 and Aug 31, it had reduced the number of sick projects in the country from 360 to 345, and the number of abandoned projects from 109 to 108.
Since the taskforce was formed in 2023, 1,260 private housing projects with a combined gross development value of RM121.44 billion have been successfully redeveloped, it said.
The ministry said this was achieved by more effective monitoring, better collaboration with different stakeholders, and intervention when construction timelines are not met.
Tan said more can be done, particularly in Johor.
“Ensuring housing projects are completed on time is extremely critical for Johor. It protects homebuyers who are paying loans, sustains confidence among local and foreign investors and reinforces Johor’s reputation as a reliable property market, especially with the RTS and SEZ driving demand,” he said.
https://www.channelnewsasia.com/asia/malaysia-johor-bahru-sick-abandoned-stalled-property-buyers-limbo-5379511
