View of Yangon from the top of the Sakura Tower facing north. Pic: Myanmar Times archive

YANGON’S property market has been forecast to go up about 20 percent in 2008 and investors are tipped to do well, sources in Yangon’s property market said.

They said prices for properties which are strategically located for doing business will increase this year as investors’ interest is shifting to the sector and away from the gold and car markets which have featured prominently in recent years.

“As investors have focused on long-term capital gains most property on the main roads of Yangon is in the hands of investors, rather than owner-occupiers,” manager of Unity Real Estate Agency U Zaw Zaw said.

A spokesperson for another real estate agency who requested anonymity said the hotspot for investors this year may be property along Kaba Aye Pagoda Road in Bahan, Yankin and Mayangone townships and along Pyay Road in Kamaryut, Hlaing and Mayangone townships. Properties along Dham-mazedi and Parami roads are also expected to do well.

Property prices in these areas will rise this year and secondary locations, in the lanes off these main thoroughfares, will also go up as a consequence, the person said.

Prospects for high-rise buildings are not so good and most building applications have been for six and eight-storey buildings, said U Zaw Win, the Chief Engineer (Building Department) of the Yangon City Development Committee.

“We have seen more applications to build six and eight-storey buildings in the areas where high-rises are normally requested,” he said.

Since buildings over 75 feet tall must have an elevator we have seen more eight-storey buildings, Yangon residents said.

“Although there are few applications to build 10 and 11-storey buildings, we have seen more applications for 6 to 8-storey buildings,” he said, adding perhaps not many high rises will go up this year.

He said prices for construction materials for skyscrapers also determine how many are built.

He said the price of the construction materials is not stable although labour charges have not significantly increased.

U Zaw Zaw of Unity Real Estate agency said investors may buy units in high rises in business areas since they showed more interest in condominiums at the end of last year.

“Places in a good environment, such as near Inya and Kandawgyi lakes, are expected to see more 12-storey buildings,” Ko Myo, a director of Yadanarmyaing Construction said.

Yangon’s main industrial zones should see increasing interest, particularly Shwe Pyi Thar, sources in the property market said.

“Transportation charges are lower for industrial zones like Shwe Pyi Thar since there is no river to cross. Investors prefer industrial zones with good transportation infrastructure although there are some attractive good-sized plots available in the other industrial zones,” U Zaw Zaw said.

Because of a newly-enacted tax and revenue act which allows investors not to disclose sources of income if 7pc stamp tax and 8pc profit tax are paid, investors are returning to the property market, which will cause property values to be strong this year, the sources said.