Building Permit Applications Dry Up as Apartment Sales Decline in Yangon
The number of applications to obtain building permits in Yangon has declined this fiscal year due to sluggish apartment sales, official data shows.
More than 8,000 building permits were handed out in the previous financial year of 2014-15, while in 2015-16 until January 31 only 5,800 building permits have been issued, according to Yangon City Development Committee (YCDC).
“The number has gone down because apartment sales have slowed considerably. Many people are reluctant to get permits now to start construction,” an YCDC official from its Building Department who wished to remain anonymous told Myanmar Business Today.
Lack of support from the government and a dearth of financing from the local banks have also contributed to the slowdown in construction sector, industry insiders say.
Lately, YCDC tightened regulations for building contractors in the wake of a huge rise in illegal constructions around Yangon. The Fire Department also tightened restrictions on constructors amid rising fire hazards in the city.
U Maung Maung, chairman of Zaykabar Construction Company, told Myanmar Business Today, “The decrease in construction businesses have been caused by two factors: the businesses do not get much assistance from the government and the increase in licence fee from the Fire Department. The Department should’ve kept its standard rate.”
He added construction businesses have been slumping recently and claimed that his company’s business has fallen by more than half from the previous year.
The YCDC has also recently tightened regulations on off-plan apartment sales, where contractors sell apartments before the construction even begin to finance their projects. A lot of such constructions never took off as contractors ran away with customers’ money.
However, U Maung Maung claimed this kind of swindling have reduced recently and YCDC should allow more off-plan sales to revive the construction sector.
Source: Myanmar Business Today
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