Low-cost apartments – like this block in Sanchaung township, Yangon – are proving popular with buyers in a resurgent market.

YANGON’S property market, which recently began recovering from a 20-month setback that had lasted since late 2005, has seen another sharp increase in both sales and rentals in August, according to several real estate agents.

While the market appears to have reinvigorated itself, prices remain stagnant.
“We have been busier with customers since early August,” said U Than Oo, managing director of Mundine Real Estate company, who can rarely be found at his office now.

“From dawn to dusk there are customers calling and coming into our office to search for the most suitable home,” U Than Oo said.

Such comments were rare in the slump that began in November 2005 when the government announced that it would be relocating to Nay Pyi Taw. Almost overnight Yangon’s real estate went into a prolonged freeze as investors became reluctant to put money into the market.

The slump appears to have ended in an indirect manner: A significant increase in the price of used cars – brought about by the government quashing rumours that older cars would be banned from Yangon’s streets – left many people who had invested heavily in used cars with unexpectedly large money reserves to reinvest.

And many of these chose the property market to spend their cash.

U Than Oo said that the change in used car prices was a great contribution to the resurgence of property market.

“It relieved us from a very difficult period. There had been no big changes in the market since 2005,” he said, adding that the used car market has now gone as far as it can.

“Car prices have skyrocketed, leaving no potential to make profit from selling them. People are moving out of that market and investing more in property,” he said.

More proof of the market’s resurgence, U Than Oo said, was the activity during Buddhist Lent and rainy season, which are usually quiet times.

“Market demand just has not stopped this time,” he said.

He said commercial properties have played a key role in the continued demand during monsoon.

“People buy or hire commercial properties year-round without considering Lent or rainy season, so that demand has certainly been a market foundation,” U Than Oo said.

U Phyo Zaw Nyunt, managing director of Olympic Real Estate, agreed.
“Though it is Lent now, we keep receiving more and more customers in our office every day,” he said.

He also said that both residential and commercial properties are now being sought.

“Even if people don’t want to shift house during Lent, they buy new houses and decorate them to move into after Lent,” U Phyo Zaw Nyunt said.

However, both agents said that the increase in demands had not affected prices.

“At first, prices moved slightly up but since June they’ve held,” U Phyo Zaw Nyunt said.

U Than Oo said that stable prices have helped to attract customers to invest in property.

“The market is not fluctuating that much so people consider it to be a reliable investment,” he said.

Another real estate agent, U Aung Ko Win, said that the market resurgence is mainly limited to low- and middle-priced properties.

“The most sought-after properties in the market are usually low priced,” said U Aung Ko Win, a marketing manager with Unity Real Estate Company.

He added that the apartments priced between K6 million and K10 million, and houses priced between K20 and K50 million, show the highest demand.

“Though people have shown more interest in real estate, they are still reluctant to spend too much money on one property,” he said, pointing to potential market fluctuations as a reason why.

According to real estate agents, the most sought-after locations in Yangon include Bahan, Yankin, Mayangone and Sanchaung townships, and downtown.
Agents predicted that demand for high-priced properties would also increase by the end of the year.

“Even now, some high-priced properties are being sold. If this demand continues, upmarket properties will soon be sought-after too,” U Than Oo predicted.

He also said that the new housing projects in Yangon that are approaching completion will also stimulate the market.

“If there are more supplies in the market, prices will probably go down, which will encourage more people to invest,” he said.

In fact, Yangon has not seen a large number of new properties on the market as only medium-sized properties have been developed since early last year when the income-sharing laws were altered, in the government’s favour.

The Department of Human Settlement and Housing Development (DHSHD) changed the income-sharing system for joint ventures between government ministries and private developers from 20:80 in the developers’ favour to 50:50.
Under the new scheme, developers deliberately delayed big projects to avoid losing money.

But earlier this year, the DHSHD warned developers that delayed projects would be seized by the government.

The initiative proved successful and many projects almost immediately moved forward; some are expected to be finished by the end of the year.

U Than Oo said developers would also enjoy the market’s revival.

“Increased demand will enable them to sell their houses and apartments in a shorter period,” he said.

“Both the developers and customers would benefit from this.”