Myanmar real estate news

Affordable housing projects affected as funds dry up

Myanmar real estate news In a serious blow to thousands of would-be home-owners, the construction of affordable homes in Yangon’s Ayeyarwon and Yadanar housing projects has been suspended because the money has run out, government officials say.

Urban and Housing Development department director general U Min Htein told The Myanmar Times on December 6 that the government lacked the funds to complete the projects, in Dagon Seikkan township, according to schedule.

“The Ayeyarwon and Yadanar housing projects are costing more than K600 billion (US$455 million), and we don’t have enough money to complete it. Because the department is prioritising low-cost housing it cannot [also] prioritise affordable-housing. We have therefore suspended construction of the 49 18-storey-buildings included in the project.”

Also on hold is the related infrastructure, including roads, schools, sewage systems, markets, public transportation bus lines and parks.

The project, which was launched in 2012, intends to provide 19,600 apartments and is around 40 percent complete, according to the DUHD. More than 6000 apartments in 11 buildings will still be completed this month, in time for tenants to move in by next March, it said.

“We’ve now changed the project implementation method. Since we can’t build these 49 blocks simultaneously we will do in stages,” he said. “The 18-floor apartments [in the first 11 buildings] will be semi-finished by the last week of December, and we’re making arrangements to secure residence permits by March,” he added, indicating that the sales revenue would then be fund to the next stage of construction.

Though a DUHD project on government-owned land, the project is being built by some 30 private contractors in seven phases.

The Myanmar Times contacted several of the firms that were awarded the tender for comment. U Thar Htay, chair of Original Group and chair of the Myanmar Construction Entrepreneur Association, said he had asked vice president U Myint Swe to allocate more money to the project.

Chan Tha Shwe Pyi Construction declined to comment.

First Myanmar Construction chair U Sone Han said his firm had been one of the ones to win the tender, but had declined because the construction costs were too high for it to be profitable.

Each 600-sqft apartment costs from K110,000 to K120,000 per square foot to build because of the high-rise technology employed, and the apartments sell for K60 million to K70 million, according to the DUHD.

After paying a 30 percent down payment, buyers of apartments built in the first phase can receive a loan for the remaining 70pc from the Construction and Housing Development Bank. The loans are repaid by monthly instalments over eight to 15 years, said U Min Htein. The bank was set up by the Ministry of Construction DUHD and developers.

According to some real estate professionals, government-built low-cost housing developments like Yuzana, Kanaung, Ayeyarwon and Yadanar are not particularly attractive to would-be buyers, partly because of their location.

Estate agent U Than Myint, in Yuzana Garden City, said, “They’re outside town. For the K60 million asking price, you can buy a medium-sized condo in downtown Yangon. Because they are high-rise, there are maintenance costs to pay. It costs about K15million for an apartment in Yuzana, which is very high.”

DUHD has pledged to build up to 1 million housing units in the country’s 81 most heavily populated townships by 2031.

Translation by Win Thaw Tar, San Layy and Khine Thazin Han

Quoted from mmtimes.