Drop in il­le­gal con­struc­tion as Yan­gon mar­ket slows

The Myanmar Times - - Business - MYAT NYEIN AYE my­at­nyeinaye@mm­times.com

FEWER devel­op­ers have been charged for build­ing with­out a per­mit in Yan­gon this year than in the past two years, ac­cord­ing to a city of­fi­cial, who be­lieves this re­flects a slow­down in the city’s con­struc­tion sec­tor rather than a grow­ing re­spect for the law.

Yan­gon City De­vel­op­ment Com­mit­tee lists just over 2000 il­le­gal build­ing sites across the city, a fig­ure that has fallen from more than 3000 at the height of the con­struc­tion boom two years ago, when the lo­cal au­thor­ity first be­gan to tackle il­le­gal con­struc­tion, said U Than Htay, head of the en­gi­neer­ing depart­ment (build­ing).

“Devel­op­ers of 2094 build­ings are be­ing charged by our depart­ment for four types of vi­o­la­tion,” he said. The most com­mon of­fence is start­ing con­struc­tion with­out a per­mit – 1480 con­trac­tors stand ac­cused of jump­ing the gun.

In 557 in­stances com­pa­nies have fin­ished build­ing a project with­out a per­mit, while 34 devel­op­ers have fenced off a site with­out per­mis­sion and 23 have car­ried out unau­tho­rised re­pairs.

U Than Htay said the drop in vi­o­la­tions mir­rored a slow­down in the con­struc­tion busi­ness.

Off-plan sales in Yan­gon slowed dra­mat­i­cally last year fol­low­ing a three-year boom, leav­ing some devel­op­ers with­out enough money to con­tinue to build, or to be­gin new projects.

“In pre­vi­ous years, con­trac­tors would keep build­ing even after we took ac­tion against them,” U Than Htay said.

This was true most of all in Thin­gangyun town­ship, which has been hit with 754 charges, and in Mayan­gone town­ship, where 415 con­trac­tors have been fined.

“But this year, the num­ber of cases has fallen as the mar­ket it­self slows,” he said.

In the 2014-15 fi­nan­cial year when par­lia­ment first au­tho­rised YCDC to Yan­gon City De­vel­op­ment Com­mit­tee de­mol­ish build­ings with­out a per­mit, the list of in­frac­tions reached over 3000.

Many un­li­censed apart­ments are built by small-scale devel­op­ers who en­ter profit-shar­ing ar­range­ments with landown­ers, a sys­tem now run­ning into dif­fi­cul­ties due to low buyer de­mand.

“Apart­ment sales are down about 25 per­cent, so con­trac­tors and landown­ers are afraid to in­vest,” said U Aye Lin, man­ag­ing direc­tor of Mya Nan Dar Con­struc­tion.

He said con­trac­tors have tended to fi­nance their projects by pre-sell­ing units, so a short­age of buy­ers means no new build­ing. Il­le­gal con­trac­tors have been par­tic­u­larly badly af­fected, he said.

Most buy­ers in the past few years have been prop­erty spec­u­la­tors rather than would-be res­i­dents, who have dis­ap­peared since the mar­ket be­gan to fall, a fac­tor which has also re­duced the amount of funds avail­able for new build­ing.

“Il­le­gal con­trac­tors build with­out per­mis­sion be­cause they don’t have enough de­posit money to be le­gal con­trac­tors,” said U Aye Lin.

“They con­tract with the landowner to share the prof­its 50-50 and they pre-sell the apart­ments. But now there are no buy­ers.”

‘In pre­vi­ous years, con­trac­tors would keep build­ing even after we took ac­tion against them.’

U Than Htay

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