Every family deserves a place to call home. Housing is one of the most basic foundations of a secure and dignified life, and ensuring it is among the most vital responsibilities any government carries.
With the changing times and circumstances, it is time to look at the next stage of housing policy. At this juncture, it is worth reflecting on how best that responsibility can be met. It is no longer the case that the State must only focus on building directly, but rather the time to explore how it can help the greatest number of families to buy and build homes of their own.
The role of government in housing is evolving: from direct provider, to facilitator of a housing system in which families, banks, developers, and investors each play their part — and in which every family in need of housing will have the opportunity to secure a home. To deliver this, the Government is bringing in a set of new housing policies — one of which is already underway.
I am here to share with you an outline of these new policies and the objectives they are designed to achieve.
The Pledge Is Clear, The Question Is How Best to Deliver It
The Government’s commitment is firm: every family in need of housing will have a home.
Housing demand in the Maldives is substantial. Under a single recent programme, more than 35,000 households applied for flats. Among long-term residents of Malé who are not registered in a Malé household, over 23,000 families applied for roughly 1,500 homes.
Demand of this scale calls for government to not only build, but also to create space for wider private sector involvement in housing construction. The State has never been the only builder of homes: families have historically built on their own plots, and private developers have brought homes to the market, albeit at a modest level. What’s lacking is a frameworkthat enables far more families, as well as more builders, to participate.
The Real Obstacle: Affordable Supply That Reaches the Right Families
For a first-time homebuyer today, the main obstacle they face isn’t willingness or effort – it’s the lack of affordable homes on the market.
Houses are built, but not at prices working families can reach, and the few that are affordable are quickly taken.
The consequences are far reaching and affect large numbers of families. Because affordable homes are not available in the market, families who are, in effect, capable of obtaining a bank mortgage also resort to applying for social housing insteadas it becomes the only affordable route open to them. This results in the queue for government housing growing longer, and the families in greatest need – those who could never carry a mortgage – must wait behind applicants who, in a functioning market, would have otherwise bought a home of their own.
The Government intends to change this. Social housing will be prioritised for the most vulnerable families — those for whom it is designed. And for families who can afford a bank mortgage, the Government will create affordable homes in the market through private developments, so that buying becomes the natural path for those who can, and social housing remains protected for those who cannot.
We have tried price control before. Under a model run by HDC, developers were permitted to sell 40 percent of units at market price, with 60 percent sold at a controlled price. The design was sound. But in practice, the controlled-price units were never regulated to prioritise first-time home buyers. The result was predictable: individuals with means bought multiple apartments as investment assets to rent out — while the families the units were priced for remained tenants, often in those very apartments.
The lesson is clear: price control without buyer targeting does not deliver affordable homeownership. Instead, it delivers affordable investments.
It is to address this that the Government is bringing in four policies that correct this — Help to Buy, Help to Build, and affordable housing programmes for the Malé area and for the islands. Together, they are designed to mobilise private finance to build affordable homes, ensure those homes are sold at controlled prices to first-time home buyers, and help families finance the purchase. In essence: to enable the country to build for its families.
Help to Buy
Help to Buy is the equity support policy the Government is working to introduce for first-time home buyers. Under it, the Government will contribute up to MVR 250,000 towards the family’s equity payment — the deposit that stands between a creditworthy household and a bank loan. The household contributes alongside; the bank finances the remainder on standard terms, and the family owns the home from day one.
Where it applies is designed around where affordable homes come from. In the Malé region, Help to Buy will be available to first-time buyers purchasing from the market. In the islands, it will be available to first-time buyers purchasing from a developer delivering homes under the Government’s affordable housing programme — this is to ensure that the controlled price and the equity support work together to bring ownership within reach.
The support is direct, visible, and fair: the family’s effort is matched, not replaced. And because it is a one-time equity contribution rather than an ongoing subsidy, it works with any bank, without adding to the loan or the monthly payment.
Help to Build
In islands outside the Greater Malé area, the picture is different. Families hold land, but for many it is not commercially viable to take loans for its development. Without assistance, the land sits idle while the family remains without a home of their own. The Government’s objective is straightforward: to make sure that people can build on their own land, in their own islands, to house their families.
Experience has shown us clearly what works and what does not. Under the 5 percent concessional home construction loan programme, the Government is paying the rate subsidy to bring lending down to an affordable rate — and will continue to pay it throughout the 20-year tenor of each loan. Yet, even with the State carrying that cost for two decades per loan, only one bank, Bank of Maldives, participated. A model built on subsidy payments stretching across twenty years ties the programme to institution-specific arrangements, and in practice, concentrated a national effort in a single bank.
Help to Build, the policy the Government is now working to bring in, takes an alternative approach. The Government will provide a one-time equity contribution of up to MVR 200,000 — the full 20 percent equity on a MVR 1 million loan, enough to build a three-bedroom house on the family’s own land plot. The family engages directly with the bank of their choice; the Government pays the equity contribution at once; and the State does not seek to recover the amount unless the house is sold within a specified period. Every licensed lender can participate on commercial terms, and competition improves service.
In the Greater Malé area, where land is scarce and its value is high, the need is different. There, the Government will bring changes to the planning regulations to make it easier for landowners to develop their plots — changes that benefit the landowners themselves and contribute positively to the local economy, adding homes and services where both are needed.
Affordable Housing in the Malé Area
In the Greater Malé region, where demand is most concentrated, this model has already been introduced. Under it, private developers deliver homes at controlled prices — a two-bedroom apartment at MVR 1.8 million and a three-bedroom at MVR 2.3 million. The Government will sign with the first batch of private developers very soon.
What makes these prices possible is the structure of the model itself. The Government provides the land free of cost. The project is exempted from import duties. Buyers are exempted from GST. The subsidy is embedded in the model — delivered through the price of the home rather than through a cash payment.
And this time, the defining feature is who the homes reach: controlled-price units are for first-time home buyers. That is the correction the earlier model lacked, and it is what turns price control into genuine affordable homeownership. For first-time buyers who instead purchase from the open market, Help to Buy remains available.
Affordable Housing Across the Islands
Beyond Malé, the same model would not work on its own, because what most families can afford is less. The answer is not to abandon the model but to strengthen it — by allowing the developer to cross-subsidise.
Under the model the Government is working to bring in, the Government will provide land free of cost. The developer may sell 40 percent of the units at market price, and must sell 60 percent at a controlled price of MVR 1.5 million — reserved for first-time home buyers, who can also access Help to Buy equity support of up to MVR 250,000. The market share makes the project viable for the developer; the cross-subsidy lowers the controlled price to a level island families can genuinely afford.
This model can work in islands with guest house tourism, in urban centres, and in developing islands across the country — wherever market demand exists to carry the affordable share. It brings private capital and construction capacity to communities that public building programmes alone could never reach at this scale.
What Government Must Still Do — and Do Well
This approach does not reduce the State’s role; in several respects, it becomes more demanding.
Government must design these instruments carefully and administer them fairly. Above all, it must regulate what past schemes did not: ensuring that controlled-price homes are sold to first-time home buyers, and that they remain homes for families rather than assets for accumulation. It must write the rules that protect every party — the family, the landowner, the developer, and the lender — because a market truly functions only when each of them is protected.
And it must protect social housing for the families who need it most. When affordable homes exist in the market for those who can buy, social housing can finally do the work it was always meant to do: shelter the most vulnerable, without a queue lengthened by families the market should have served.
The Principle That Guides Us
At its core, the next stage of housing policy is guided by a simple idea: government serves families best not only by building homes for them, but by building the system through which they can buy and build homes of their own — and by making sure every pathway reaches the families it is meant for.
These are the policies the Government is bringing in — to help our country build for its families. The first developers will sign soon; the rest of the system is taking shape.
Delivering the promise that every family in need will have a home is a national effort, one in which the government facilitates, the private sector delivers, and families own the result. That is the direction we are moving in, and it’s one worth pursuing together.
About the Author
Dr Abdulla Muththalib is the Minister of Infrastructure, Housing and Urban Development for the Republic of Maldives. He holds a PhD in Civil Engineering from University College London (UCL) and is leading the government’s strategic transition toward a modernised, multi-stakeholder housing ecosystem aimed at facilitating nationwide affordable homeownership.
