Drop in illegal construction as Yangon market slows
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