The Construction Ministry has invited developers to submit proposals for an affordable housing scheme targeted at middle-income first-time homebuyers across several islands.
In an announcement released yesterday, the ministry opened the opportunity for contractors to develop a total of 2,100 housing units across 13 islands under a Public-Private Partnership (PPP) model using contractor financing. This opportunity is available to 100 percent Maldivian-owned companies and joint ventures.
Under the scheme, the government will provide the land for development free of charge, grant duty exemptions on all imported construction materials for the project, and waive GST on the sale of the housing units. All other responsibilities lie with the developer, including project financing, architectural design, and the sale of the units.
The ministry stated that developers must complete construction and hand over the housing units within 24 months from the date the land is officially handed over.
The islands designated for affordable housing development include:
- Haa Alif Hoarafushi – 100 units
- Raa Ungoofaaru – 100 units
- Baa Thulhaadhoo – 50 units
- Lhaviyani Naifaru – 300 units
- Meemu Muli – 100 units
- Dhaalu Meedhoo – 100 units
- Laamu Gan – 200 units
- Gaaf Dhaal Thinadhoo – 300 units
- Fuvahmulah – 300 units
- Addu Hithadhoo – 300 units
- Addu Feydhoo – 200 units
- Addu Maradhoo-Feydhoo – 25 units
- Addu Maradhoo – 25 units
The projects will feature a mix of price-controlled "affordable" units and housing units that developers can sell at market rates. However, 60 percent of the total units in any development must be three-bedroom apartments of 900 square feet. The maximum selling price for these units is capped at MVR 1.5 million.
These mixed-unit buildings will reserve the ground and first floors for commercial use and parking. Developers are required to provide at least one motorcycle parking space per housing unit, while car parking spaces may be sold separately.
The government will determine the eligibility criteria for buyers. While developers retain the right to sell to qualified individuals, all payments must be deposited into an escrow account under the control of the ministry. Funds will be released to the developer in instalments based on construction progress.
The ministry noted that if there is insufficient demand from eligible affordable housing applicants on a particular island, developers may be permitted to sell to other parties. However, even in such cases, priority must be given to first-time homebuyers. Furthermore, if the government decides to purchase any units, the developer must agree to a price lower than the public offering price; this government purchase price must be specified in the initial proposal.
To reduce the financial burden on developers, the government has divided the housing units into packages of 50 units. Interested parties may bid for individual packages or multiple packages combined.
Eligibility criteria for companies stipulate that those applying for a 50-unit package must have earned a minimum annual revenue of MVR 25 million over the past three years. Companies bidding for more than 50 units across multiple packages must demonstrate an annual revenue of at least MVR 50 million over the same period. Additionally, applicants must have a proven track record of completing or currently managing large-scale projects.
The government maintains that launching these affordable housing units in the atolls is a strategic move to alleviate congestion in the Greater Male' Area. Officials believe that the lack of adequate housing in the islands is a driver of migration to the capital.
The ministry recently awarded the development of 1,000 housing units in the Male' region to five developers under a similar model. Those units are being sold to eligible applicants under the "Family Housing" scheme.
