The interest rates charged by banks on loans used to help low-income families purchase affordable housing units are too high, the Chairman of the Myanmar Real Estate Services Association has said.
U Khin Maung Thant said that while it was a“great thing” that banks were providing loans to help people buy affordable apartments, the rates were well above regional averages.
“Their interest rate, 13 percent, is quite a lot higher than rate in the rest of ASEAN, which is 5 to 6 percent,” he said.
The high rate means that an apartment with a face value of K10 million ends up costing between K15 million and K17 million, he said, making access to the market much more difficult for poorer families.
Only buyers with a monthly income of more than K500,000 would be able to afford the monthly repayments, he added.
Myanmar’s real estate industry has been boosted by the availability of instalment plans and bank loans, said Ma Hnin Phyu Win, Marketing Manager of a local real estate service provider.
The Minister for Construction has pledged to provide 8,000 low cost apartments under K10 million and the ministry is building low cost and affordable housing projects on the outskirts of Yangon.
The Myanmar Construction Entrepreneurs Association submitted price specifications for low cost and affordable apartments to the Ministry of Planning and Finance.
They stipulated that a 300 square foot apartment should cost K7 million for, while more than K10 million should be charged for a 500 square foot apartment.
Source: Mmbiztoday
