Tuesday, July 25, 2017

Foreign demand driving surge in rental prices

Foreign demand for accommodations and office space has helped triple the price of condominiums in Yangon in a year, real estate agents said last week.

A view from the inner courtyard of Royal Thazin Condominium in central Yangon. Photo: Aung Htay HlaingA view from the inner courtyard of Royal Thazin Condominium in central Yangon. Photo: Aung Htay Hlaing

Daw Moh Moh Aung, owner of Win Shwe Wah real estate agency, said demand has been surging since the end of last year, with foreigners leading the charge.

“Foreigners cannot buy houses, apartments or condominiums,” she said. “In the past, hotels could rent rooms for foreign companies to set up offices, but this is no longer possible [due to the short supply of rooms] so foreign companies are opening offices in condos,” she said.

Condo offices can double as homes, allowing companies to save costs on housing, Daw Moh Moh Aung added.

Ko Htun Htun, an agent for Phoenix real estate, said foreigners comprised about 80 percent of its condominium renters.

“We have many foreign customers looking at condos, but most of the interest is for rentals, not purchases. It’s getting hard to find condos available for rent,” he said.

Daw Moh Moh Aung said condo rents had surged up to 300 percent in some buildings in about 12 months.

“Last year, standard condos rented for about K500,000 a month, but that has increased to K1.5 million this year,” she said. “Some condos with better facilities are going for much more.”

An agent for realtor Moe Myint Thawtar said the limited supply of condominiums in Yangon made it likely that rents will continue to rise.

“Demand for condos at my agency is about 50pc higher this year than last year. And we have seen prices for furnished condos double this year,” she added.

Ko Htun Htun said rising condo purchase prices, which have increased by about 25pc in a year, were being passed on to renters.

“Last year condos cost about K100,000-K150,000 a square foot, but this year they are selling for K150,000 to K200,000 a square foot,” he said.

Daw Moh Moh Aung, who is also general secretary of the Myanmar Real Estate Services Association, said a proposed condominium law, which would allow foreigners to buy selected properties, would likely lead to higher quality.

“Most condos in Yangon are not really condos – they just have a lift,” she said. “A condo should have shopping, a parking space for each apartment, a gym, swimming pool, security and maintenance,” she added.

Daw Moh Moh Aung forecast that demand from foreign buyers will rise, and urged the government to make more land available to developers at cheaper prices to allow them to build more housing.

“If the government made more land available, developers could build cheaper housing, which would reduce rent,” she said.