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Yangon blighted by housing woes

There’s no doubt many Yangon residents want to own their own home in the city as soon as possible, especially those with families or planning to start one.

But for many city folks, the prices of new housing units, even those classified as low-cost housing, are beyond their reach given the current state of the economy and their incomes, according to real estate developers.

So far the most urgent housing requirements are for low-cost housing and affordable housing for ordinary people, U Myo Myint, secretary of Federation of Myanmar Construction Entrepreneurs Association, said.

“The housing requirement is huge. But the prices, the strict requirements for bank loans and the bad economic conditions of the people have deterred them from acquiring new homes,” he said. “It is not that people don’t want to buy but they just can’t afford it.”

Ma Khaing Khaing Aye from Thingangyun Township, said she is not satisfied with the quality of materials used in government low-cost housing projects.

“We try to buy affordable housing from the government. But we weren’t able to get it so we tried to buy indirectly from another person. But the price is not worth the quality of the building, so we did not push through with it,” she said.

Ma Khaing Khaing Aye noted that many people from other regions and states stayed in rented flats in Yangon because interest rates for bank loans are very high.

“They would like to buy a flat but they are discouraged by high taxes and high interest rates on loans,” she said.

Developers and the government need to work together in order to fulfill this need for basic shelter, U Myo Myint said.

He observed that flats built when the previous government was in power are being sold by the current government but no new housing projects have been implemented yet.

He said the problem is not only about building new housing estates but also ensuring that there is basic infrastructure to go with these new developments.

The government needs to provide land, basic infrastructures like roads, bridges, water and electricity, U Myo Myint said, adding that if the government lowers the taxes levied on construction materials, developers could build better low-cost housing.

“Banks also need to loan money with lower interest rates and reduce the requirements for acquiring loans,” he said.

So far, the government has plans to build around one million units of housing by 2030. Over the last two years, it has built around 10, 924 units. Of these, 5748 units have been fully finished, the Ministry of Construction said.

Around 5176 more units are 70pc complete and by the end of next March, another 1570 units will be completed. The government also has plans to build 10,000 units with the help of private companies under public-private partnerships.

The government-run Construction and Housing Development Bank is giving out loans for the citizens to be able to purchase affordable and medium-cost housings.

Buyers are required to pay the minimum downpayment which is equivalent to 20pc of the total cost of the unit and the balance of 80 pc will be financed by the bank at an interest rate of 8 percent a year. But many buyers find the interest rate still too high.

An official from the Public Housing Committee said that in July, 864 buyers won the lots to purchase government housing units in Yangon, but around 100 of them were not able to pay the downpayment or disliked the units offered them.

For far-off areas such as South Okkalapa, Hlaing, and Mayangone townships, the market for the rental and sales of home is active, according to property-market insiders.

But it noted that in the case of government’s low-cost housing, there are more resellers than buyers. This has also become a problem since the resellers put mark up on the original price, thereby increasing the resale price of the unit.

U Htoo Myat Naing from the Estate Myanmar real estate agency said another issue is the quality of the construction.

He noted that many buyers were not satisfied with the quality of the materials used in the construction so they hold off buying a new property.

“Allow private firms to build on government land. Fix a price and it should be open to all to buy,” he said.

U Htoo Myat Naing also underscored the importance of infrastructure, especially road connections and transportation facilities to the new housing areas.

“Only if transportation is good, will the government be able to disperse people to the outskirts of the city rather than having to deal with the crowding in the central urban area,” he said.

Yangon Chief Minister U Phyo Min Thein said in a talk with businessmen on November 2, that due to the new developments in the city, more employment opportunities have opened up and more people from the rural areas decided to try their luck in Yangon.

“Due to increasing job opportunities in Yangon, people from all over the country move to the city. Without enough resources in hand, they face difficulties,” he said.

At present there are believed to be over 150,000 squatters in Yangon.

U Phyo Min thein said that if you add the requirement of government and company employees in the city, the government needs to build 300,000 housing units.

SOURCE: MYANMAR TIMES

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