Govt needs proper housing policy, critics say

Instead of giving housing projects to business people close to them, the government should lay down proper housing policies to solve the problem of rising property prices partly due to market speculation, critics said.

Following economic liberalization, increasing foreign investment and inflow of black money into real estate sector, property prices in Myanmar, especially in Yangon, have seen a significant surge and the grassroots bear the burnt of it. Although Myanmar is still lagging behind others in terms of development in Southeast Asia, its property prices are of world-class and could be compared with those in Barcelona.

“In fact, the government should formulate a proper housing policy. It must reflect actual situations. Then, the government should promote the level of the people. Actually, low-cost housing should be subsidized by the government. Low cost doesn’t mean reducing quality or size. It means the government subsidizes. If not, it won’t be easy,” said an engineer who owns a business in Yangon.

“Malaysia government set aside 5 percent of the budget for housing and Singapore does 2.5 percent. Myanmar doesn’t have any. For affordable housing, there should be financial support. Buyers should be offered mortgage facility. Myanmar needs strong financial market for it. Another problem is squatters. There are many cases.”

He also suggested cross-subsidize program giving the example of Malaysia’s 30:70 program where developers need to subsidize 30 percent. He said it is a kind of wealth distribution as the rich’s money is given to the poor. The opposite is happening in Myanmar, he noted.

Yangon’s population currently accounts for 10 percent of the total population of the country. It is expected to increase due to urbanization and employment opportunities in the city. Corresponding to it, there are increasing housing needs in Yangon.

The government is therefore implementing low-cost housing projects in suburban areas of Yangon. In North Dagon, there are Bobahtoo and Bominyaung low-cost housing projects being implemented in cooperation with private companies. In Hlaingthayar Township, Shwelinban low-cost housing started receiving applications from those interested to buy apartments. Yangon region government said they have received about 100,000 applications during July.

“Although it is called low-cost housings, let alone the grassroots, even the middle class can’t afford them. If they are built for the grassroots, the prices should be fair. Now, the prices are so high. Moreover, the quality of low-cost housing is low compared to the price. It is just in the interest of a group of cronies,” said Zaw Chit from Yuzana Garden Housing.

At the Shwelinban low-cost housing, there are only 24 buildings with 576 apartments available. The number of applicants is about 200 times larger than the available units. Sales will take place on draw-lot system. The Department of Human Settlement and Housing Development (DHSHD) and the Construction and Housing Development Bank will make installment plans and loans available for the buyers.

Yangon region government said an apartment in Shwelinban housing may cost between Ks 11 million (US$11,000) and 12 million ($12,000).

At the Bobahtoo affordable housing, 400 units will be available but 13,000 people submitted applications to be able to buy the apartments. The price may range between Ks 20 million ($20,000) and 30 million ($30,000).

Critics pointed out lack of transparency in the government’s process of selecting companies to carry out these housing projects.

“Actually, there should be free competition for the projects and the market will determine itself. It isn’t good to control everything. If competition exists, sellers will offer the best price. That’s the way,” said an industrial business person.

“These housings are of low quality. They won’t be in good condition after 4 or 5 years. The walls have only one layer of bricks. Their prices aren’t announced to the public transparently. Look how many people want to buy home. So, they will be sold on draw-lot system. Looking at this fact, one can imagine how many people are homeless in Yangon,” said Tun Thaung from Tharkayta Township.

In 1950, Yangon city area was 86 sq kilometres and its population was 1 million. In 1974, the city area became 210 sq kilometres and its population doubled to 2 million. In 1995, the city area was further expanded to 592 sq kilometres and the population increased to 3 million. In 2013, the city area became 794.43 sq kilometres and the population 5.14 million, according to Yangon City Development Committee.

“If new city will be built, there will be increasing housing needs. We are trying to meet these needs to some extent. Yangon region government is also carrying out low-cost housings but they also have financial constraints and difficulties. When [housing projects] are carried out in eastern and western districts, people complain why not north and south? There is also a new city project and companies will contribute 20,000 rooms. But, these units are to be offered under the State’s title. It might not meet all the needs but it will fulfill most. When we invite applications, the number of applications received is so big. We heard the apartments do not reach to those who really need them. However, the government properly managed the applications according to the rules and regulations,” said an official of Yangon region government.

“The government needs to do evaluation on the real estate sector. It is the government’s job to look the whole sector. They must review rules and regulations as well as facilitation. Monitoring and advocacy are difficult tasks,” said a retired officer of the DHSHD.

He said Malaysia is a good example in housing management. Malaysian government gave rating to those interested to buy home based on income, age, marital status and disability. Low income people are given more points. Disable people are also given more points. It means houses are sold to people who really need them. The process is transparently carried out online, he noted.

There is also a large low-cost housing project for which Yangon region government received approval from the President Office in 2012. The project for Ayeyarwun and Yadana low-cost housings will provide 10,000 units after completion. The project went to the hands of those companies close to the government including Shwe Taung Development, ACE and Dagon International.

“Even if the government tries for transparency, the problem of demand and supply imbalance will remain. For example, dealers might buy apartments to resell and make profit. Big companies also have human nature. They want to get market price. I mean if the government tells them to sell the rooms at Ks 24 million ($24,000) and the market price is Ks 40 million ($40,000) to 50 million ($50,000), the companies will make twists and say they have sold at Ks 24 million but actually sell at market price in some ways. In fact, if there is strong demand in Myanmar, the market should be open. Then, the prices will go down,” said a business person.


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