Bank interest rate causes doubling in apartment cost
THE CURRENT interest rate causes buyers to pay double the cost of an apartment despite use of an instalment plan.
“We are selling affordable apartments on the basis of an instalment plan. The current bank interest rate is 13 per cent – but Asean is showing about 5 per cent.
“For example, the buying rate is 10 million kyat (Bt250,000) and the interest rate may be 5 or 7 million kyat for a long run.
“If so, the buying rate is twice the real cost of the apartment,” said Khin Maung Than, chairman of the Myanmar Real Estate Association.
He said the bank paid money for the interest of the affordable apartments, but the international community has been quick to point out this high interest rate.
“Banks’ long-term loans are a good plan for customers who want to buy affordable apartments, and we must welcome this arrangement.
“The price of buying an affordable apartment by credit is higher than that of buying it in cash, because the bank interest rate is 13 per cent a year,” he said.
“The cash-down plan is 20 per cent or 30 per cent. It can be done only by those earning more than 500,000 kyat a month. For high-paid workers, this is convenient,” |he said.
For buyers who will purchase an affordable apartment at about 10 million kyat, the credit resettlement period was previously eight years, but now it has been extended to 10 years, according to the Construction and Housing Development Bank.
