YANGON’s property market has bucked the global trend, with commercial property in high-population areas booming, according to industry sources.
U Zaw Zaw, manager of Unity Real Estate Agency, says the property value increases were sparked by changes to Myanmar’s property tax laws.
In August 2007, the Ministry of Finance and Revenue announced that property buyers no longer had to supply their sources of income when paying the eight percent sales tax and seven pc stamp duty to the government.
Previously, buyers who did not supply their income sources to the tax office had to pay 50pc of the value of the sale price.
The effect of the changes has been a property market bo-om, U Zaw Zaw said.
“Yangon commercial property prices began increasing as soon as the government announced the tax changes. This was partly because at the time businesses did not want to be left holding cash, they wanted a solid investment,” he said, adding that investors have opted to put their money into property in high population areas.
Yangon’s six downtown townships – Kyauktada, Pabedan, Latha, Lanmadaw, Pazuntaung and Botahtaung – have been amongst the most popular areas for commercial property, because the population in those areas has increased with people migrating from rural townships.
The main roads of Mayan-gone, Bahan and Kamaryut townships have also proved to be popular areas for comm-ercial property investment.
U La Win Tun, manager of Asia Land Real Estate Agency, said he expected commercial property prices to continue increasing and apartments and condos are the next due to the people who is extra money in handed has become invested.
“Property prices are still increasing, especially in the detached houses. Prices are now up by 10pc to 25pc since the changes to the tax laws but of course this depends on the location as well as access to transportation. The downtown commercial areas and nearby areas are popular, as are the roadside properties of Pyay and Kaba Aye Pagoda Roads. People are very interested in investing there, there’s is a lot of demand from retailers because of the excellent location,” he said.
According to the current market prices, properties located on those main road has risen from about K150,000 per square foot to as much as K250,000.
Industry sources said properties along Pyay and Kaba Aye Pagoda Roads are doing so well they’ve been called “htar kaung yaung soon”, real estate slang that means demand is so strong the price will continue to rise and the seller will have no difficulty finding a buyer.
U La Win Tun said in the outlying suburbs of Yangon – North Dagon, North Okkalapa and South Okkalapa – there has also been an increase in demand due to people migrating to Yangon.
“More and more people are migrating into Yangon from nearby areas and Ayeyarwady Division to either set up businesses or search for better job opportunities – this has been happening since the end of 2004,” said U La Win Tun.
He said that, while commercial property prices in the downtown areas would not decrease, demand and prices in Bayintnaung and Yuz-ana would most likely begin to increase as businesses looked for cheaper options in commercial districts.
“We expected the property market will be even more buoyant in 2010 than it is at the moment. The health of the market is closely related with the economy and we anticipate that after 2010 there will be an influx of foreign direct invest-ment that will boost property prices,” said U Zaw Zaw.
U La Win Tun agreed the market would continue to improve and said he expected demand to increase, not only in the downtown areas, but also in surrounding townships such as Kyi Myindaing, Sanchaung, Tarmwe, Insein and North Dagon.
“Property in those townships has a lot of potential as an investment because when the prices in downtown becomes too high, investors will have to look further afield,” he said.
