Rental properties like this Bahan township house, featured recently in House of the Week, have become cheaper for foreigners following the rise in the FEC rate on August 22. Pic: Aung Tun Win

THE rise in the value of the FEC – the government-issued foreign exchange certificate – coupled with the influx of foreign aid workers in the wake of Cyclone Nargis, has pushed up rents in central Yangon, real estate sources said last week.

And rents in the delta region for accommodation suitable for foreign aid workers are now higher than in Yangon, according to local residents in Ayeyarwady Division.

UN agency and international NGO staff deployed to Myanmar after Nargis snapped up detached houses and condos that met their needs for privacy, parking space and communications and internet access – mostly in Yangon’s Bahan and Kamaryut townships, says U La Wun Tun, the manager of Asia Land Real Estate agency.

U Zaw Zaw, the manager of Unity Real Estate, said rental rates for foreigners had risen by 10-15 percent with the influx of foreign aid workers since the last week of May.

A suitable apartment can now be rented for about US$300 a month, compared to $200-plus before the cyclone, and the rent for a detached house has risen from $600 to up to $700 a month, depending on size, location and other factors, in those townships.

“Foreigners must change their US dollars for FEC on arrival at the airport. When landlords ask for payment in dollars, the tenants have to change FEC back by buying dollars on the market,” says U Zaw Zaw.

Last month, the government allowed car-owners to pay for fuel in FEC over and above their daily 2-gallon quota. The value of the FEC rose from K950 to K1100.

“The foreigners were pleased when the FEC rate went up because now they don’t lose money,” U Zaw Zaw said.

Real estate sources believe the rental market for foreigners will remain buoyant over the next two years thanks to ongoing rehabilitation work in the delta. According to delta residents, rents in Bogale and Labutta township rose significantly following the May cyclone. A detached house there can now be rented for K300,000 to K800,000 a month – more expensive than Yangon, sources say.