IN a series of recent articles, FocusM highlighted the various causes that lead to property developments being termed “sick” or “abandoned”.
Surmising that these ailing projects are a main cause for the property sector’s slow post-COVID-19 recovery, it called for White Knight developers to step in and take over these projects.
To further highlight the merits of such a move would have on the domestic property sector, FocusM outlines the various consequences that sick and abandoned projects have on various stakeholders as well as the impact these have on surrounding environment.
Most significant and directly affected are the buyers of these properties who have been saddled with bank loans but no end product.
In October 2021, the Housing and Local Government Ministry identified 79 abandoned housing projects involving 17,724 housing units in Peninsular Malaysia currently, affecting 11,824 buyers.
What is alarming is the number of these errant developers who have wrapped up operations and vanished, leaving stranded buyers with no real recourse.
They are burdened with hefty housing loans but no houses which FocusM believes is utterly unacceptable.
Allowing White Knight developers with proven track records to take over ailing projects would, at least, alleviate the stress and hardship of some of these affected purchasers.
When a developer bails on a project, aside from purchasers, the other parties most directly affected are the various subcontractors, vendors and suppliers who have committed to these developments.
Some will have provided services and products but not received payments or have their operations severely disrupted caused by the sudden abandonment of a project that was supposed to be a vital revenue stream.
This spill over effect is where the overall economy is affected due to stuttering cash flow and small and medium enterprises (SMEs) struggling to adjust to the halting of construction work at affected sites.
Abandoned projects also have grave impact on the environment. Left unsupervised, the site quickly becomes derelict and becomes a breeding ground for mosquitoes and other pests.
This is no minor irritation as abandoned projects can cause surrounding locality to become dengue hotspots.
Needless to say, pests of the human variety also contribute to the problem. Instead of being home to purchasers, these abandoned sites quickly become hosts to drug addicts.
Abandoned projects also stick out like sore thumbs greatly affecting the desirability of the surrounding locality.
This can even affect mature and highly desirable neighbourhoods such as Subang Jaya, where the abandoned Remix 1 project has severely undermined surrounding property values.
Occupying prime acreage in the mature and affluent neighbourhood of USJ1, Subang Jaya, the Remix 1 project has stalled due to its developer Mammoth Empire Holding Sdn Bhd facing financial difficulties.
Given the many adverse consequences of these abandoned projects, FocusM is reiterating its call to have White Knight developers alleviate the situation.
In the short term, reviving sick and abandoned projects will avoid the issues outlined above, while the long-term impact would be a robust and healthy property market that will push the overall economy’s post-pandemic recovery. – Sept 2, 2022
