KUALA LUMPUR: The Housing and Local Government Ministry is studying a proposed option-to-purchase (OTP) mechanism to reduce sick and abandoned housing projects and better protect homebuyers.
Its minister Nga Kor Ming said the mechanism would introduce a more structured process before sale and purchase agreements are signed, allowing developers to gauge genuine demand while safeguarding buyers' interests.
"At present, developers often assess market demand through the collection of booking fees.
"However, this presents several challenges, including difficulties in distinguishing genuine buyers from those who are not serious about purchasing, while homebuyers risk losing their booking fees if they choose not to proceed," he said.
Under the proposed mechanism, developers would be given a specified period to assess buyer interest before deciding whether to proceed.
Buyers could pay up to five per cent of the proposed purchase price and submit their financial information for loan assessments.
If the developer decides not to proceed, buyers would receive a full refund together with accrued interest.
Through the proposed OTP mechanism, developers would be required to honour the indicative price initially offered to buyers, ensuring that the final selling price remains unchanged.
"For developers, this means greater certainty over genuine market demand. For homebuyers, it means greater transparency and price certainty before making a major financial commitment.
"Through this reform, we want to ensure that buyers will never have to pay for houses that they will never get," he said at the 5th Malaysia Developer Awards 2026 on Wednesday.
Meanwhile, Nga said the ministry secured a larger allocation under the 2027 Budget to implement big data analytics to address housing supply-demand mismatches.
This follows an 8.6 per cent increase in completed but unsold residential units in the first half of 2026.
The initiative would also support the government's target of delivering one million affordable homes over the next decade under the National Housing Policy 2026–2035.
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