Sunday, August 20, 2017

4.8 million housing units required by 2040

The government’s national policy on housing will take into account the country’s urbanisation and urban migration.

Workers cut rebar on the Mahabandoola low-cost housing project. Aung Htay Hlaing/The Myanmar TimesWorkers cut rebar on the Mahabandoola low-cost housing project. Aung Htay Hlaing/The Myanmar Times

Myanmar's commercial capital will need 1.07 million housing units by 2040 and the entire country will require an additional 4.8 million units by then, according to an official from the Ministry of Construction.

The whole country will need 4.8 million housing units by 2040, based on the population growth rate between 1983 and 2014, said U Nway Hmu, deputy director of the Housing Development Division under the Ministry of Construction.

The deputy director made the re-marks during a presentation organised by the property website House. com.mm.

According to the 1983 census, the national population was 35.29 million. It increased to 51.48 million in 2014, according to the 2014 census. Based on that population growth rate, Myanmar is expected to have 70.56 million people by 2040, U Nway Hmu observed.

The number of housing units increased from 6.75 million in 1983 to 10.88 million in 2014, according to the census. It is expected to reach 15.68 million in 2040, he added. Hence, by 2040 the country will need an addition of 4.8 million housing units.

Based on 2014 census, there were 1.58 million housing units in Yangon, and it is expected to reach 2.65 million housing units in the city. Thus, an extra 1.02 million housing units will be required by 2040.

The deputy director said that the department will provide 20 percent of demand in housing units and expect the rest to be supplied by local governments and the private sector.

“We expected that Yangon will need about one million housing units by 2040.

“[The] DUHD planned to provide 20pc of housing units and expected the rest 80pc to produce be produced by the local governments and the private sector,” U Nway Hmu said, and added that over the 23 years, the department plans to construct 8,000 housing units per year.

Nitesh Khirwal, the property website’s managing director, expected that urbanisation will increase the housing demand, and especially demand in affordable housing, in cities such as Yangon and Mandalay. The developments in different sectors will result in the population migrating from the rural to urban areas.

The managing director highlighted that construction of affordable housing is included in the list of the government’s prioritised investment sectors.

“Demand on [for] affordable housing will be more and more.

“As [In] the Myanmar Investment Commission [MIC] announcement for Prioritised Investment Activities in Myanmar, Construction of Affordable Housing sector is included at No. 9,” said Nitesh Khirwal.

In addition, the deputy director analysed the main features of housing sector in his presentation. One of the key findings is that the preparation of the National Housing Policy needs to be closely aligned with the Ministry of Construction’s National Urban Policy.

He added that the widespread absence of secure titles for land and apartments poses a major impediment for further expansion of housing supply and modernisation of stock. Ambiguous tenure arrangements are affecting both the formal and informal market: the arrangements curb investment in maintenance and improvement in informal units, and drive up financing costs in the formal sector.

The official explained that policies accepting informal settlements and implementing incremental improvements should be considered. Large-scale sites-and-services schemes on state-owned land need to be re-introduced.

According to the press release from House.com.mm, a spokesperson of Construction and Housing Development Bank (CHDB) said they will endeavour to offer mortgage loans for house buyers, who will then purchase affordable housing units constructed by the private sector.

In order to address the housing demand in the next 15 years, the DUHD plans to produce 900,000 housing units across the country (see graphic).

Nyan Linn Htet, the head of PR and content at the property website, told The Myanmar Times that the part of the solution to the housing demand will be affordable housing and mortgage loans.

“The government is developing affordable housing in many cities like Yangon, Mandalay and Nay Pyi Taw, and especially Yangon.

“More people are moving to cities and the solution may be affordable housing and mortgage loans.

“There are so many families who need a home. But they cannot buy by down payment. If they get mortgage loans, they can buy easily. If so, private developer[s] will be willing to develop more and more affordable housing,” Nyan Linn Htet said, who added that the demand will not only dominate the cities but also create new urban clusters in the country.

Types of housing

According to the DUHD, there are different ways of categorising housing projects.

In terms of income level, there are low-cost housing units, affordable housing and condominiums (or high-class housing).

In terms of ownership, there are public, staff, rental and private housing.

In terms of the unit structure, Myanmar has a diverse range of housing units, from apartments and brick house to wooden and bamboo housing. As of 2014, wooden, apartment and bamboo dominated the Yangon market, accounting for more than 80pc of the total units in the city.