Property: Sell-Then-Build (STB) vs Build-Then-Sell (BTS)

It's been a hot discussions ever since many years back. Which one is better? Benefiting developers or house buyers?

To be announced during Budget 2015 ?

When comes to housing, current practice by various developers were the STB method. The key advantage for developer is the 10% deposit (placed by house buyers) can be used to offset a portion of interest being charged by banks for the construction costs. Moreover, it can helps developers to minimize the cash flow problem during construction period, and better still channel the funds to other housing projects. In return, the selling price during launching date might be lower to attract buyers.

However, house buyers are subject to higher risks such as untimely delivery of house, defect issues, and worst still abandoned project. These are the price that house buyers of STB method need to bear.

Anyway, given the current good economy environment and favorable interest rate, very few abandoned projects being seen for the past few years. This feel good factor implying that the risks mentioned seems to be forgotten by optimistic buyers. Please bear in mind that good times may turn into bad times, if global economy goes under water.

The Opportunists...

Due to STB method, property prices tends to run up along side with the completion date of a project. In view of the current loose liquidity, it attracted opportunists, instead of genuine buyers, to buy properties during launch date and sell it off once completed for a profit. Opportunists here refers to syndicate buyers and speculators. This had been identified as one of the reasons why property prices escalating rapidly.

The Solution is BTS ?

In order to curb these group of opportunists, some argue that BTS method was the solution. And, it can eliminate the various risks associated during construction period. In contrast, the advantages of STB mentioned above were gone. Developers would need to bear a higher risk now, and do you think that the property selling price will tick up? Definitely... This may not help, but worsen the affordability of house buyers. If BTS to be announced during Budget 2015, what's your reaction then?

Question: In your opinion, which method is better?