MCEA to start affordable housing construction
By Tin Yadanar Tun | Monday, 19 June 2017
[The Myanmar Times] The Myanmar Construction Entrepreneur Association (MCEA), in cooperation with the government, will start building affordable housing units for low-income earners within this year, a senior association official from the organisation said.
“The government and the MCEA will start constructing affordable housings – namely public housings and rental housings – within this year.
“The government will manage these residential building blocks while the MCEA will build them,” said U Kyaw Kyaw Soe, MCEA joint secretary.
Low-cost housing is usually implemented by the Ministry of Construction, which sells units through a 10-year instalment plan via the Construction and Housing Development Bank.
This is the first time that private developers and the government will implement affordable housing projects through a public-private partnership model (PPP) in the property sector.
Public-private partnerships between a government agency and private-sector company can be used to finance, construct and operate projects, such as night markets and public road networks.
U Kyaw Kyaw Soe said that the affordable housing buildings will consist of six floors and the units will vary between 450 square feet and 600 square feet which will cost between K10 million and K20 million per unit.
“The unit price of public housing will vary between K10 million and K20 million depending on the location, the size of the unit and the kind of land,” said a spokesperson for the MCEA.
To implement the public housing projects, the government is conducting a survey on the number of government staff who will retire next year and the township they would like to live in. The survey is already half way completed.
Public housing will be built in townships where most residents want to buy units and the Yangon regional government’s zoning plan will also be considered in implementing the new housing projects, he added.
Although public housing will be built by developers of the MCEA, the Ministry of Construction will manage the buildings and will be the one who will sell the units.
These public housing buildings will be financed through bank loans and will not use government budget, said U Kyaw Kyaw Soe.
“We will not build those public housings with government��s budget; we will build with the loans from banks.
“Most loans for both developers and unit buyers will be from Myanma Economic Bank and other private banks,” he remarked.
The government and the MCEA are still negotiating about the amount of down-payments, instalment period and interest rates for these new affordable housing units, the official added.
“We are negotiating the percent of unit price, which may be 15pc or 20pc. This can be convenient for house buyers.
“We are also trying to reduce the housing loan’s interest rates from the current 13pc annual interest rate charged by the banks. If we can reduce the interest rates and increase the instalment period, buyers would not have to pay as much per month,” he added.
Public housing will be constructed not only in Yangon, Mandalay and Nay Pyi Taw but also in the capitals of other states and regions, he said.
“Public housing will be built in cities that need housing and cities with a high density of populations. So most housing will be built in regions like Yangon, Mandalay and Nay Pyi Taw. We will start constructing public housing in Nay Pyi Taw, the administrative capital,” he said.
U Kyaw Kyaw Soe said rental housings would be rented out for K30,000 per month and will be built in Yangon and Mandalay by the MCEA within this year.
“Rental housing will be built for the people who stay in dormitories and will be built, currently, in Yangon and Mandalay.
“This is because most students and workers move from other states and divisions to Yangon and Mandalay for education and employment opportunities,” he said.
Rental housing will be built with the government’s budget and hence the number of housing units will be less than that of affordable housings, which is built by MCEA developers, U Kyaw Kyaw Soe said.
Chief Minister U Phyo Min Thein said the government is already implementing low-cost housing, rental housing and public housing for retired staff, squatters and the homeless residents in collaboration with some developers and these units will be sold after construction is completed.