Most abandoned houses in Selangor

By P. Rajan

Despite stringent guidelines governing the housing industry and increasing public awareness about problems associated with housing development, cases of abandoned projects continue to be a bane of the industry, albeit on a declining trend.

For the whole of 2004, a total of 227 housing projects were abandoned in Peninsular Malaysia, according to figures released by the Monitoring & Enforcement Division of the Ministry of Housing and Local Government.

Selangor contained the most number of abandoned projects at 55, or 24 per cent of the total, worth about RM2.4 billion or 33.7 per cent of the total value of the abandoned schemes.

However, this should not come as a surprise, considering the significant number of housing projects implemented to meet the needs of a growing population attracted by the opportunities in the State.

According to reports compiled by the ministry as well as the National House Buyers Association, the main reason given by developers for abandoned projects over the years has been “cash flow problems”.

Other States with a comparatively higher incidence of abandoned projects include Penang with 24 projects (11 per cent), Negeri Sembilan 22 (9.7 per cent), Pahang 21 (9.2 per cent) and Johor and Perak each with 19 (8.4 per cent).

Although the Federal Territory of Kuala Lumpur accounted for only 18 abandoned projects, it was the second highest in terms of value, at RM2 billion or 28.8 per cent of the total.

In general, the abandoned projects captured in 2004 consisted of 75,356 housing units with an estimated value of RM7 billion. Most of them were at different stages of completion.

A silver lining in the cloud is the number of projects with potential to be revived, which has steadily risen since the 1997 Asian economic crisis.

From a low of 43 projects in that year, it rose to 121 in 2004, registering an average growth of 20 per cent per annum over the last six years. This is in tandem with the rising economic prospects during the period.

As a result, a total of 1,948 housing projects with a total estimated value of RM20 billion were successfully rehabilitated between 1997 and 2002.

- Property Times 12 November 2005 issue -

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