Abstract —This paper sets out to study, define and reclassify delay in housing delivery system in Malaysia. In the recent years, the issues of delay related to housing and its development are gradually increasing in particular the housing project in Malaysia although the traditional delay factors have been applied to tackle this problem. Therefore, there is a strong need to reorganized and reclassified the delay factors in order to find an effective resolution and way out to solve the problems. This research was carried out through both primary and secondary sources. Triangulation approach has been utilized, in which quantitative method is used to collect data whereas qualitative method is essential to be used for data validation. Based on the data collected, a Structural Equation Modeling (SEM) model has been form, showing the relationship of structural delay, institutional delay and cultural delay in relation to housing delivery. From the study conducted, it is found that institutional delay is the major contributor to housing delay in Malaysia. Through the data validation of housing delay index, the study concluded that the Malaysian housing industry is currently experiencing moderate delay. The results from this study would help construction practitioners, developer, consultants, contractors, policy makers, and researchers to have a deep understanding on the delays factors caused in construction process so that proper mitigation measures could be taken place. Index Terms—Delay classification, Malaysian housing delay, housing delay index, structural equation modeling I. INTRODUCTION Construction industry is known as the driving force behind most businesses to boost up the economics of country especially in Malaysia. In this regard, it is a great challenge for the construction industry because it plays significant role to create wealth, improve the life quality of the citizens via the provision of social and economic infrastructures and it connects the whole economy spectrum with a multiplier consequence that makes other industries to prosper alongside. Hillebrandt [1] stated that the construction industry, by nature, has many special problems. It can also be said that delay is the major issues and costly problem in construction industry as it decelerates the growth of the nation’s economic development. This can be supported by Hamzah [2] that “Delays still occur in construction projects as the industry is famed for poor risk management, with many projects failing Manuscript received October 25, 2013; revised December 24, 2013. This work was supported in part by the Innovative Construction Alliance, Faculty of Civil Engineering, Universiti Teknologi Malaysia. Chang Saar Chai is with the Faculty of Civil Engineering, Universiti Teknologi Malaysia (e-mail: cschai2@live.utm.my). Aminah Md Yusof is with the School of Graduate Studies, Universiti Teknologi Malaysia (e-mail: aminahyusof@utm.my). to meet deadlines and cost targets”. In Malaysia, Ministry of Housing and Local Government Malaysia [3] has emphasized some common issues associated to the discarded projects, delay in issuance certificate of fitness, delay in handing over, poor workmanship, interest charged by the developers because of late progressive payments, the unwillingness of developer to pay compensation for late delivery and payment problems related to maintenance in order to has a perceptible improvement in construction industry. Moreover, Ahmed [4] and Wa’el Alaghbari [5] claim that the possible factors that lead to delays in Malaysian construction projects are financial problems such as financial problems of clients (economic problems, financial difficulties and delayed payments), external factor of poor economic conditions (inflation rate) and cash flow problems of contractors. On the other hand, due to lack of comprehensive analysis on the sources and how the problem should be addresses, the delay problems arise easily. Therefore, the causes of delay should be focused and drawn attention through analyzing and classifying so that an accessible and approachable manner is expected. This paper is outlined as follows. First of all, a great deal of information regarded with construction delays clarification may be found in the literature review to present a clear view about delays. Secondly, research methodology is explained on how the survey is conducted. The next section is followed by research findings in which analysis and discussion are discussed in detailed way. Lastly, the paper concludes with a brief summary of findings and the new classification of housing delays. II. LITERATURE REVIEW Recently, there are many studies related to construction projects have been investigated as the number of problems in construction projects experiencing delays are increasing because of various reasons. It is also believed by Alaghbari [6] that one of the most challengeable and complex troubles found in a construction project is delay. Ahmed et al. (2003) also agreed that delay is viewed as a worldwide and universal phenomenon. According to Sadi and Sadiq [7], in the viewpoint of construction, delay is regarded as an unexpected of the extension of time beyond the date of completion in an agreement or beyond the agreed period that the parties granted to deliver a project. Moreover, the projects in medium and large size face the problem of delay the most while the small projects are severe [8]. Besides that, in the research of Alaghbari [9], they claimed that financial Chang Saar Chai and Aminah Md Yusof SEM Approach: Reclassifying Housing Delay in Malaysian Housing Industry Journal of Economics, Business and Management, Vol. 3, No. 3, March 2015 364 DOI: 10.7763/JOEBM.2015.V3.211