Real estate market heating up again: agents
Volume 31, No. 603
November 28 - December 4, 2011
A former ‘House of the Week’ in Yangon’s North Dagon township. Real estate agents said investors had returned to the market since the start of November.
Pic: Myanmar Times Archive
CAPITAL is a funny thing, particularly in a market where cash is king.
Investors in Myanmar have limited options, which results in a situation where one commodity can be the subject of intense speculation for a period until something changes that market or makes a new stream more attractive.
For most of 2011, speculation in the real estate market was rife and prices rose consistently across the board. At the same time, interest in cars – another major investment market – continued to abate and prices kept falling, until the Ministry of Rail Transportation announced a car import substitution program in early September.
Within days major interest and money had been focussed on buying cars with old number plates that could be exchanged for import permits to bring in newer vehicles.
But with the car import substitution well underway, investors have returned to property, several real estate agents said last week. Most predicted that investment interest would regain pace and continue through the first few months of 2012 at least.
U Zaw Zaw, the manager of Unity real estate agency in Mingalar Taung Nyunt township, said he expected most buyers in coming months to be looking for investment properties, not residences.
“Our agency is seeing increased demand in several of Yangon’s suburbs such as South Okkalapa and Thingangyun, which are regarded as hot locations. But I think buyers are looking at real estate purchases as investments; not many are buying for residential necessity,” he said.
U Zaw Zaw added that most sales were for houses in the K300-700 million range. However, he said there has been strong interest all year in the city’s industrial zones such as Hlaing Tharyar, Thilawa, Shwe Lin Pan and Mingalardon, with plots selling for between K70 and K500 million an acre depending on the zone and its infrastructure.
U Sai Khun Noung, the managing director of Sai Khun Noung real estate agency in Tarmwe township, confirmed that investors had returned to the real estate market.
“When the government unveiled the car import substitution plan in September interest in the property market dried up. But investors seem to be coming back since early November,” said U Sai Khun Noung.
He said demand centred on Dala, North Dagon, South Dagon and the same industrial zones identified by U Zaw Zaw.
U Sai Khun Noung said investors had returned to the real estate market because it was easier to make money.
“Car importers can’t earn big profits when they sell their cars, particularly not compared with property,” he said, adding that his agency is handling 20 percent more requests from customers in early November than the same time in October.
U Khin Maung Aye, the owner of Shwe Kan Myay real estate agency in Tarmwe township, said buyers are looking to the future in the expectation that the country would continue to liberalise.
“We have sold several plots of land at the Thilawa Industrial Zone for between K55 and K150 million. I think people are buying such properties in the hope they will quickly appreciate in value,” said U Khin Maung Aye.
“What’s more, buyers are increasingly looking at far-flung townships such as North Dagon and Hlegu where they can buy big plots. We’ve sold 50pc more such plots in November than during October,” he said.
U Min Min Soe, from (Mya) Pan Than Khin real estate agency in Lanmadaw township, said more than 50pc of purchases handled by this agency in the past have been for commercial ventures.
“Interest in the car market dramatically impacted on the real estate sector for a couple of months but investors are turning back to property again. Six out of 10 clients coming to us in November were looking to buy land for commercial purposes in Mayangone and Insein townships, with prices ranging from K150-450 million,” he said.
However, he added that despite the renewed interest in the market prices have not yet started to rise.