Rehda masking real issue

30/06/2007 NST Letter-to-Editor By Yin Ee Kiong, Penang

The Viewpoint in NST-Property on June 23 ("Far from being rotten") refers.

Lengthy and seemingly complicated debates can often be reduced to a single salient point if we focus on the core issue. The rest are just verbosity and obfuscations.

The debate on the Sell-Then-Build (STB), Build-Then-Sell (BTS) or 10:90 system variant is one such argument.

When it first emerged two years ago, the Real Estate and Housing Developers' Association (Rehda) fought tooth and nail to prevent the implementation of the BTS 10:90 system.

Now, it is fighting for STB to be retained as an alternative to BTS/10:90. It wants the government to run the two systems together "to give buyers a choice". But isn't it Hobson's choice when the overwhelming majority of developers cling to STB?

The core issue is how the government can effectively protect house buyers from unscrupulous developers.

Statistics often mask the tragedy. We forget that percentages represent real people. Thus, it is unconscionable for the writer to imply it is 'acceptable' for two per cent of house buyers to lose their money.

To date around 250,000 people have become victims, directly and indirectly, of rouge developers - people who will probably pay the rest of their lives for something they will not get.

Rehda's argument that 98 per cent of housing transactions are successful, so there is no need to 'throw the baby out with the bath water' is flawed. It is akin to saying the use of a certain medicine should be allowed since it has proved efficacious and the number of deaths it caused is minor.

In the case of house purchasers, there is an alternative BTS and its 10:90 variant, which can eliminate the kind of abuses STB cannot prevent. It boils down to "your give me a house, I give you the money". It's as simple as that.

By Rehda's own admission, it cannot totally weed out rogue developers among its members. I would also like to address the other points raised in the Viewpoint:

• Is Rehda implying that the housing industry will collapse, thousands of jobs will be lost and out and our country's prosperity threatened if we change to the BTS/10:90 variant? Then how come in most countries in the world using a BTS-type formula, their housing industries are as robust as ever?

• As to the writer's claim that developers have 'heavily subsidised low-cost housing,  infrastructure and other amenities", the truth is that it is house buyers who subsidise these, not developers!

• The writer should not claim that "more houses have been built under the STB system and at a faster rate than in any other country in the world' without laying bare the basis for this. Some countries have a mature housing market while in some others, the people are relatively less prosperous than us and therefore, the demand for housing is limited.

• To attack the National House Buyers Association (HBA) for its perceived "rhetoric and emotion" is to draw attention away from Rehda's own in defending a system that has served its members well. No other industry has the luxury of being funded by its purchasers upfront.

When a system (such as STB) has been in place for decades, people tend to accept it as the norm. They assume that that is how things are done and even if they question its fairness, they do not challenge it.

Having recognised the need to reform the housing industry, the government should not miss the opportunity of making changes that will leave no avenue for the kind of abuse house buyers in this country have had to endure for so long.