PROPERTY sales are down, especially at the high end of the market, as a result of the global recession, say real estate industry professionals. Local estate agents are saying that a review of the first four months of this year is showing bleak results.

Demand for properties above K100 million is particularly poor, they say, and customers are buying only small-scale properties for their immediate needs.
U Zaw Zaw, manager of Unity real estate agency said “Last year property sales amounted to some K600 million, but this year the range is about K100 to K200 million. Sales so far this year are half what they were in the last four months of last year.

“Last year quarter, the ratio of sales to rentals was about 50:50. But so far this year it’s more like 20:80, because of the significant drop in purchases,” he said, adding that reduced spending power had resulted in a sharp decrease in condo prices between January and April. Owners had reduce the sale price of condos in the K80-100 million range by up to 17 percent in Bahan and Mayangone townships, but only 5-7pc for K10 to 40 million apartments in Sanchaung and Tarmwe, he added.

“This year there will be less money in circulation and less spending power. Demand for properties above K100 million will be rare,” U Zaw Zaw said.
Another reason for the slowdown is that well-heeled customers are awaiting the privatisation of a number of government buildings, which they think will be cheaper than market value, U Zaw Zaw said.

U Than Oo, managing director of Mundine real estate agency, said: “People want to sell properties rather than buy, according to the queries we’ve received. The market is cool and people want to invest in businesses other than property, which is hard to sell at the moment.

“Property is a secondary category that relies on trade in other commodities. This time last year business was good even at the high end of the market, but this year so far there are more rentals. Properties costing K70 million and above are showing poor demand,” he said.

U Ko Ko Lay, director of Three Friends Construction and Decoration, said low demand in the property sector would affect the whole industry.

“This quarterly the property industry is facing low demand in a lot of different areas but particularly in sales; this is likely to affect everyone involved in the industry and will stop people from buying properties to quickly on-sell them at profit,” he said.

He added that one potential boon was rentals, where already built but unsold apartments were likely to be put up for rent to earn at least some revenue for the developers.

“During this period where it’s tough to make sales, we’ve decided to establish long-term leases with a number of clients, which at least means we’re earning some money from these properties,” he said.

He added that developers were only working on contracted sites and finishing buildings with definite deadlines, leaving many other potential projects on the drawing board.

U Ko Ko Lay confirmed that a number of developers were accepting payment for properties in building materials, land plots or even gold.

“In this quarter condominium sales, even in main locations, are down by up to 15pc and apartments 10pc,” he added.