Real estate agents have cited that the cause for the drop in property sales is due to ineffective sales strategies used by construction entrepreneurs.
Business owners have put their best efforts in developing the Yangon real estate and property sectors, and for their construction sectors to expand. But they tend to neglect sales techniques for real estate and property, said Kevin Goos, managing director of Shwe Property.
“These construction entrepreneurs are eager to expand their projects, and are always expanding their industries, but these new, rising businesses are still weak in securing a market,” he said.
He also added that it’s extremely important, when selling estates, to create a market suitable for potential buyers to buy conveniently. The market has to be buyer-friendly.
“When you are selling estates and apartments, you have to find your target market and calculate your potential buyers, only then can you start your project [to sell] and strategise on how to best sell these properties to the buyers with ease,” he continued. “Your properties should also be configured to a model where the buyers can handle their payment without any troubles.”
When the real estate is on sale, the entrepreneur should avoid selling all the apartments at the same time. They should sell the apartments in separate phases, and sell a portion of the apartments in each phase, according to Mr Goos.
“I’ve seen that most construction entrepreneurs sell all of their middle and big-sized estate projects immediately. Instead of selling these projects all in one go, they should separate their project into phases and should only sell new rooms after the rooms [from their previous phase] have been sold out,” he noted, “Otherwise … selling the remaining rooms is going to be troublesome,” he said.
In other countries, when the sale of an estate project begins, the sellers, i.e. construction entrepreneurs, are given the ability to rent the rooms that have been sold, but this kind of action is, to this day, very rare in Myanmar.
“There are many people who buy either affordable apartments or high-cost housings as an investment. In other countries, if they start selling any housing projects, they can also rent out. Companies provide services for buyers who want to rent out their apartments. They [companies] calculate the price of rent fees for one month and how much buyers will get back in one year. Buyers do not need to do anything.
“But that kind of service is non-existent in Yangon. The numbers of buyers can increase, if renting service projects are made when the sales of the estates starts,” he added.
There are also weaknesses among local construction entrepreneurs, because their approach is inefficient in selling housing projects. They need to sell to the right people, said U Thar Htay, chair of Myanmar Construction Entrepreneurs Association.
“The construction enterprises are very weak in selling sectors … They are weak in selling in markets and attracting buyers [who do not own apartments] to be able to buy,” he added.
The construction entrepreneurs cannot sell apartments through long-term instalments, an approach necessary for a lot of people who are in the market, explained U Yan Aung, general manager of Asia Construction.
“People who do not own apartments want to buy through instalments, but firms have difficulties in selling through instalments. They need to sell instalments through banks like how it works in other countries, and Myanmar also needs to develop its banking system,” he said.
The fact is – to be strong in the real estate market – the necessary legislations cannot be prescribed in time, according to U Yan Aung.
“The real estate market is slowing down as the laws regarding real estate and real property cannot be established on time. Although the condominium law has existed for years, the rules pertaining to the law have not been established. As there are no rules, the law has not taken effect yet, and we cannot sell the condominiums to foreigners,” he said.
The condominium law needs to be enforced as soon as possible so that expatriates and international developers can purchase property and housing projects, which will then boost the real estate market, said U Kyaw Kyaw Naing, the managing director of iGreen Construction Company Limited.
For new urban housing plans and low-cost housing projects, construction business owners should cooperate and assist in the construction of basic infrastructures and implementation of an efficient public transport system, he added.
“Low-cost housing cannot be constructed in the city area where the land value is high. If we were to build the housing in the outskirts of the city where the land value is relatively low, we need to implement a city bus system for the dwellers.
“For residents in low-cost housing, bus lines for easy commutes are essential, although parking lots are not necessary,” he said.
U Kyaw Kyaw Naing explained that construction business owners need to focus on market research and should consider including basic infrastructures to meet the requirements of the target market.
“According to the law, a parking lot is needed in any buildings with more than eight floors and a lift. However, the parking lots should not be added to the low-cost housings as the residents have no use for them. Instead, an efficient bus system is needed, and the construction business owners should inform the government of this issue,” he said.
– Translation by Kyaw Soe Htet, Khine Thazin Han, Swe Zin Moe