Homeownership “is the basis of stability and security for an individual or family. At the center of our social, emotional, and sometimes economic lives, a home should be a sanctuary—a place to live in peace, security, and dignity.”
Therefore, home is not a commodity but a right.
Section 1 of Article 7 of the Constitution guarantees the right to life and liberty as one of the first fundamental rights. Our monarchs have worked hard to ensure these rights, beginning with the reduction and elimination of numerous taxes; and continuing with the grant of land to landless citizens for land rehabilitation. However, besides His Majesty’s initiative, successive governments have given the least priority to any form of homeownership. With the exodus of Bhutanese leaving the country for Australia, mainly for economic reasons, homeownership should become a greater priority than ever.
Many countries have made homeownership a priority, considering its impact on everyone’s lives. For example, Singapore introduced homeownership and later the “down payment and mortgage payments for homes through Central Provident Fund (CPF) savings in 1968.” An Asian Development Bank Institute working paper revealed in 2016 that the “homeownership rate for the resident population has been above 90% since the early 1990s” in Singapore. Similarly, Japan has a homeownership rate of over 60% as of 2018.
In Thailand, the government initiated the Housing Welfare Program through the development of abandoned state lands nationwide. The government made this possible by allowing civil servants to pay 30-year installments at a 3 percent annual interest rate, with monthly payments not exceeding 3000 Baht. The average salary in Thailand is around 20,000 baht per month for civil servants. In Australia, the Home Guarantee Scheme helps homeownership through the National Housing Finance and Investment Corporation. The buyers have to pay as little as 5 percent of the total amount payable, and in the case of family-first buyers, only 2 percent of the total price initially.
Here, Business Bhutan reported: “a 3-bedroom flat was available for Nu. 3.5 million in March 2022 and would cost around Nu. 6 million” by August 2022. At this price, adding inflation and income taxes, even the Prime Minister’s salary won’t be enough to buy a three-bedroom flat, if he saves his entire salary without spending a penny for a five-year term. Further, the current housing loans are exorbitant with a floating interest rate that probably will only increase, inviting more non-performing loans. The housing loans are available only for those who have landed in urban towns or have enormous wealth as a mortgage and are not available to most of the population, including senior public servants.
Thus, if the government does not come up with a homeownership scheme any time soon, the most affected will be those who live on a monthly salary, including most senior public servants who are staying back without going to Australia or elsewhere. They will be the ones homeless after serving the country for decades as savings from salary remains a dream considering the living expenses in the country. Affordable homeownership will also be one of the key factors in reversing the Australia rush, as it will establish the certainty that one can own a home without going abroad or being wealthy at home.
Sonam Tshering
Lawyer, Thimphu
Disclaimer: The views expressed in this article are author’s own.