KUALA LUMPUR: Financial institutions are likely to provide project financing to developers for the 10:90 build-then-sell concept on a case-by-case basis, Affin Bank Bhd director (enterprise banking) Zulkiflee Abbas Abdul Hamid said. 

Under the 10:90 concept, a house buyer will make a 10% down payment when he signs a sale and purchase agreement and will settle the rest when the house is ready for occupation. 

Zulkiflee, also a board member of The Association of Banks in Malaysia, said while the concept was good, it would take time to be applied on all residential and commercial developments in the country. 

“A bank will want to ensure the developers have a good record before giving them project financing to limit the risk,” he said at a seminar on Build-Then-Sell: The Way Forward yesterday.  

Zulkiflee said it would take time before the 10:90 concept took off as all parties involved, including the banks, must be comfortable with the new project financing structure. 

The National House Buyers Association honorary secretary-general Chang Kim Loong said the concept would be good for property purchasers. 

“Buyers will not need to make progress payment (after the 10% deposit) until the house or commercial property is completed with certificate of fitness, title deed and water and electricity fitted,” he said. 

In the long run, Chang said there would be fewer abandoned projects because the banks would ultimately financed the projects even when developers ran short of cash.  

He praised the Government for supporting the 10:90 concept by coming out with the one-stop shop for all the administration work and approvals needed by developers to fast track their projects. 

“It used to take years for some approvals but now the Government has insisted that projects be approved within a stipulated timeframe – within months – effective June 12,” said Chang.  

H.H. Low & Associates principal and chief executive officer Low Han-Hoe said the 10:90 concept, if successfully done, would be good for the nation. 

“The fact that we are now discussing ways to fine tune this concept shows the maturing of the property sector and its players, including financial institutions,” he said. 

Low said there might be some teething problems initially, but if everyone supported the concept, the property sector would continue to be buoyant.