Identification of Risks Pertaining to Abandoned Housing Projects in Malaysia

Table 9

Interview response.

Types of responses towards	Details of respondents
Weakness in financial management by developer	All respondents agreed that weakness in financial management by developer is the main cause of abandoned housing projects. They believed that the problems of abandoned housing projects mostly come from developers as they are considered the critical parties who carry out the process of developing housing projects and therefore they should be able to manage their financial resources efficiently. In fact, the respondents believed that the housing developers should be willing to take any action required in dealing with risk involved in the project and manage it systematically. Financial issues by developers in housing projects can lead to serious consequences that will prolong the progress of housing project and subsequently will influence the overall performance of the housing project. It is, therefore, crucial for developers to manage and maintain the capital flows in each phase of the construction project to ensure that the project can be completed within allocated budget and time.
Weakness in construction management by developer	Almost all of respondents agreed that the weakness in construction management by developers is one of the factors contributing to the abandoned housing projects. Some examples of weakness in construction management by developers were mentioned. For instance, it has been reported that some of the developers inaccurately estimated the time to complete the project as well as the required quantities of construction resources for the project due to the lack of real understanding of the laws which resulted in abandoned housing projects. The respondent believed that such problems come from the new and inexperienced developers. Hence, it was suggested that it is necessary for inexperienced developers to learn the technical knowledge of construction management methods and practice them in order to mitigate the failing conditions and to complete the projects within the schedule.
Economic crisis such as Asian Financial Crisis	All developers and nearly contractors agreed that economic crisis such as Asian Financial Crisis in 1997 can be considered as one of the causes of abandoned housing projects. They stated that economic crisis can directly affect the construction organization and results in financial shortage. However, majority of respondents from government and private agencies believed that this is not a major factor contributing in abandoned housing projects as they are just seasonal causes and all parties involved in housing projects should be well-prepared in advance.
Shortage of construction materials	Half of respondents agreed that the shortage of construction materials is considered as one of the factors contributing to abandoned housing projects. They believed that the lack of construction materials brings negative impacts to any construction project, so that it affects overall progress of each phase of the project. It indeed forces contractors to leave the project site and subsequently leads to project delay and project being abandoned.
Not achieving target sales due to the high prices market	Except developers who stated that not achieving target sales due to the high prices market is one of the causes contributing to abandoned housing projects, other respondents believed that this is not a serious risk in housing industry because the abandoned housing projects in Malaysia are usually low to medium cost houses.
Not achieving target sales due to the weakness in sales marketing	Again except developers who believed not achieving target sales due to the weakness in sales marketing is the cause of abandoned housing project, the rest of respondents did not agree on this statement. Although they believed that sales marketing in housing development is an essential element in selling houses to buyers, it still cannot be considered as a major factor contributing to the issues of abandoned housing projects in Malaysia. A few suggestions on how to make a sales marketing become more effective were given including the developers should formulate, implement, and manage a comprehensive marketing plan from design, concept, and pre- and postsales processes for any housing development program in order to ensure that the target sales will be achieved.
Housing development without feasibility studies	Majority of respondents agreed that housing development without feasibility studies can be another cause of abandoned housing projects. They believed that the feasibility study is an important matter and should be taken into consideration even though it is just an option for developers. Moreover, they stated that, without the feasibility study, the problems of abandoned project might become more serious. The feasibility study can help the developers before they make any important strategic decision for developing the housing projects. Feasibility study is a detailed analysis by company and it is conducted in order to predict the results of a specific future course of action and to determine whether a certain plan of action is feasible and whether or not it is economically worth doing. For example, a company might perform a feasibility study to evaluate a proposed change in location, a purchase of major equipment, or the introduction of a new technology and service. In such situations, a feasibility study will help developers to understand the impact of any major changes in the project. A good feasibility study would also review a company's strengths and weaknesses, its position in the marketplace, and its financial situation. Throughout this process, the feasibility study will show developers the various consequences and impacts associated with the plan of action and automatically will prevent the probability of project from being abandoned.
Poor construction management by contractor	Almost all of respondents believed that poor construction management by contractor is also a factor of problems associated with abandoned housing projects. The contractor is the most important person in any construction housing project and responsible for monitoring the construction work at site regularly. Inexperienced contractor can bring many problems to the project, such as shortage or excess of construction materials due to the misestimation, taking the unskilled workers at project site, and lack of equipment and machinery which enable the construction team to complete each phase of project within specified time. The poor performance of contractor will clearly cause delays to the projects and induce the problems associated with abandoned housing projects.
The excess of housing units supply	Almost half of respondents agreed that excess of housing units supply may be considered as one of the causes contributing to abandoned housing projects; however, they mentioned that this problem is rare to happen and it can still be prevented earlier through proper planning by parties involved in housing projects. Developers are also encouraged to do feasibility studies on the project site before making any decision for housing development.
Financial failure by contractor	Again half of respondents agreed that the financial failure can also cause the problems associated with abandoned housing projects. The respondents commented that the responsibility of contractor is very critical in executing any housing projects. A contractor should have a good construction planning and also efficiently progress the construction works as planned. However, a weak financial position may result in a contractor’s financial failure, leaving the contractor unable to fulfill the requirement of the contract which will lead to the occurrence of abandoned housing projects.