Low-Cost Housing Project To Build More Than 10,000 Apartment Units

The Ministry of Planning and Finance has submitted a housing project to the Union Parliament which was held in Naypyitaw to construct more than 10,000 low-cost apartments through the Japan’s financial support during the next three years, according to the Ministry of Planning and Finance.

The housing project including 405 buildings with 11,914 apartments will be built in Yangon Region, Ayeyarwady Region, Magway Region and Sagaing Region starting from the 2017-2018 fiscal years to 2019-2020 fiscal years, said U Maung Maung Win, Deputy Minister of the Ministry of Planning and Finance at the Parliament on February 22.

“Those who want to buy low-cost apartments through the housing loans must have a minimum household income of K 300,000 per month and those who want to buy fair-cost apartments must have a minimum household income of K 500,000 per month,” the Deputy Minister said at the Parliament.

Initially, the buyers have to pay 20 % of the apartment’s price and the remaining 80% can be paid through 10 to 15 years installment plan at an interest rate of 8.5 percent. They have to follow the terms set by the Myanmar Economic Bank and the Japan International Cooperation Agency (JICA) while paying housing loans back.

The project has not covered the whole country’s housing needs because there are more than 700,000 squatters only in Yangon Region according to the survey of Chief Minister U Phyo Min Thein, Yangon Regional Government. Therefore, the project with more than 10,000 apartments will no enough for the whole country, said U Aung Hlaing Win, Lower House MP of Mingalardon Township.

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“If it takes 3 years to build 10,000 apartment units, the project will not be efficient for the public. In China, the rental housing projects benefit for the million people,” said U Aung Hlaing Win.

Myanmar obtains loans of Yen 15 billion from Japan with an annual interest rate of 0.01% and only the interest will be paid back in the first 10 years and the capital can be paid back in the following 30 years.

The loans will be borrowed responsible by the Ministry of Planning and Finance and the Myanma Economic Bank as third party. The Ministry of Construction and Housing Development Bank will lend the loans to the buyers at an interest rate of 8.5%,” said U Maung Maung Win.

“The Ministry of Planning and Finance will take 1% of the interest, Myanma Economic Bank and the Construction and Housing Development Bank will take 3% of the interest. The remaining 1.5% will be saved in a reserve account in the Myanma Economic Bank,” he said.

The lawmakers of the Parliament criticized the high interest rate set by the respective ministries compared with the low interest rate set by Japan. In addition, they criticized sharing the high interest rate to the private banks.

“We have discussed the previous cases of loans borrowed from the foreign countries at the low interest rates and lend to the buyers at the high interest rates but then the Parliament has approved again without doing any changes,” said U Aung Hlaing Win.

Next, some people have also complained that they have transport difficulties as the housing projects were in the remote areas.

“Those apartments are in remote areas outside Yangon but our offices are in town so we have transport difficulties. Now, the government is planning the housing projects for the government’s employees. If those housings are really affordable, the public will become interested in the projects,” said an Education official in Sanchaung Township.

During Daw Aung San Su Kyi’s visti to Japan in November 2016, the Japan Government has promised to support US$ 8 billion including private investment to Myanmar.
Japan’s loan support includes the Housing Finance Development Project of the Ministry of Construction. Therefore, Japan provides ODA loan for Myanmar’s affordable housing projects with the low interest rates.

Credit: The irrawaddy
Translated by: iMyanmarHouse.com