ACCORDING to several Pyinmana real estate agents land sales at Paung Laung district in Nay Pyi Taw are booming as soaring rental prices force many to look for ways to reduce their long-term costs.

Daw Zin Mar Latt from Sein Kaung Real Estate says sales have been busy in the past three months in areas near Paung Laung 2 and 3 districts, north of Pyinmana, as people try to escape the rent trap.

“Monthly rental fees for two-storey buildings jumped from K100,000 to K200,000 three months ago to K400,000 now,” she says.

“Sales of properties around 2400 square feet in size and priced at around K8.5 million are strong. I think buyers also like Paung Laung because it is close to where a 10-lane highway will be built,” she says.

U Soe Win, a businessman based in Pyinmana, says another spur for increased property sales is a sharp increase in the size of deposits for rental properties.

“Two-storey rental houses in the downtown area that were leased for K200,000 incurred a K1 million deposit. But now that rents have increased to K400,000, deposits can be as high as K3 or K4 million. That’s why people are choosing to buy land and build their own home rather than rent,” he explains.

“I think most people would prefer to pay rental fees but with deposits costing almost as much as land it makes more sense to build your own home,” he says.

U Soe Win says buyer interest in the Paung Laung area has surged as rumours that the government might seize lands for highways or infrastructure – and not pay compensation to the owners – have proven inaccurate.

“Actually people whose lands are confiscated are compensated with plots on main roads,” he says, adding that most buyers are either locals or government employees.

U Soe Win says people who buy properties in Paung Laung Districts 2 and 3 see a bright future for their investments.

“At first, people were buying in Thapyay Gone district but they have now shifted their attention to Paung Laung because it’s close to the bus compound and has better transport. Nay Pyi Taw City Development Committee (NCDC) has also announced the construction of a 10-lane highway there in the summer,” U Soe Win says.

And he’s willing to put his money where his mouth is: “I’ve also bought some land in the Paung Laung area,” he says.

Investors were initially interested in the Thapyay Gone district until prices rose too high, so they switched to Paung Laung.

“At the moment, prices for properties in the Paung Laung districts are still low and workable for most people in the market but I think prices will increase in the coming year – possibly going as high as K30 to 40 million,” he says.

U Than Htay, owner of Shwe Kokau Real Estate, says Paung Laung is active because of many government employees from Yangon are looking for their own homes.

“Most of these buyers are government employees who have shifted from Yangon; they’re looking for 2400-square-foot compounds on the Sein Pan Pyar road for about K10 to K15 million.”