The government has stated that the estimated budget for next year will include USD8 million to cover the rent reduction of the Hiya flats developed in Hulhumale' Phase II.
The Ministry of Finance has submitted a report to the Parliament of the Maldives outlining the proposed state budget, earmarking funds to be allocated to the Housing Development Corporation Limited (HDC) as part of a housing subsidy. The subsidy aims to facilitate the cashflow management of the corporation, addressing challenges arising from the mandated rent reductions in effect for the next five years. The ministry clarified that the subsidy is a one-time measure, foreseeing an improvement in the company's midterm revenue without enduring additional financial constraints.
The government implemented a reduction in Hiya flat rents from USD551 to USD408 per month in May, prompting an extension of the loan repayment period for the Hiya flat initiative from 25 to 27 years. HDC assured that no interest would be applied during the additional two years.
The government decided to decrease Hiya flat rents to provide financial relief to housing unit owners who had taken loans to complete the finishing work on their flats. The government proceeded with the reduction, despite acknowledging the potential adverse impact of rent cuts on expenditure.
The Hiya housing initiative, comprising 6,720 housing units, was developed at a cost of USD400 million, secured through a loan. The flats were handed over without finishing works, and the government initiated rent charges in April of the previous year, following three opportunities given to unit owners to complete the finishing work.