Govt to invest a record MVR 3 billion in housing next year

The government has allocated a record high figure in the projected state budget for next year to address the biggest social issue facing the Maldives – a lack of housing.

The MVR 56.6 billion budget presented to the Parliament by Finance Minister Moosa Zameer on Thursday includes an allotment of over MVR 3 billion for housing, including MVR 1.5 billion to run housing projects.

During his 2023 presidential campaign, President Dr. Mohamed Muizzu had promised to introduce home construction loans at a low interest.

The 2025 budget includes an allotment to issue up to MVR 2 billion in home construction loans at a 5 percent interest rate.

This marks the biggest budget allocation for housing projects to date.

Presenting the budget to the Parliament, Zameer said the government will directly run MVR 1.5 billion in projects next year to alleviate the housing crisis. According to Zameer, the projects will be run in islands across the country.

The government has said that the two key housing policies will rein in “a golden age in housing.”

“No doubt, housing is one of the biggest social issues facing the Maldivian people. Providing an effective solution to the housing crisis and ensuring that a large percentage of the Maldivian people have housing is one of President Dr. Mohamed Muizzu’s biggest visions. The biggest priority when compiling the 2025 budget was towards ensuring housing to the Maldivian people as envisioned by the President,” he said.

President Muizzu, a civil engineer, previously served as housing minister from 2012 to 2018, making him the longest-serving housing minister in Maldivian history. During his presidential campaign, he promised to resolve the country’s housing crisis by the end of his term.

The Maldives has a population of some 500,000 people, including its migrant population. While the country has hundreds of islands, most of the population is concentrated in the greater Male’ area, with the capital, Male’ City, ranked the fifth most densely populated island on Earth. Many of the people in Male’ live on rent in cramped but expensive apartments.

The housing crisis has also been linked to multiple other social issues.

Other islands across the country are facing similar issues.

Meanwhile, many those who do own land are unable to build homes due the high cost of home construction.

According to the 2025 budget figures, the projected expenditure for next year is MVR 49.2 billion. Meanwhile, the projected revenue and grants stand at MVR 39.8 billion, with the government expecting to collect USD 120 million in grants.

The budget also has an allotment of MVR 12.4 billion for Public Sector Investment Program (PSIP) projects. According to the Finance Ministry, this includes the highest allotment for new PSIP projects to date.