Skyrocketing real estate prices could deter new foreign investment that enters Myanmar, officials and economic experts warned on Saturday.
The construction project of the Yangon-Dala River crossing bridge will be suspended during the current government’s term as commercial real estate booms in urban Yangon, Dala township, President Office Minister U Soe Thein told a press conference in Nay Pyi Taw on Friday.
The friendship bridge will cross the Yangon River to link urban Yangon with Dala township, the other bank of Yangon river and the bridge was planned to be built by South Korea.
“The land prices increased sharply due to the hearsay news of the construction of the Yangon river-crossing bridge and setting up of an industrial zone in Dala where there is plenty of land and work force,” a local economist said.
Foreign investors will find it difficult to do business in the country due to such high property prices, U Soe Thein said.
The government will stabilize real estate trade with a controlling system, he added.
At present, the price of one square foot of real estate along Yangon main road ranged from 1,000 U.S. dollars to 1,500 U.S. dollars.
The price of one square foot of estate properties has been fixed for Yangon region and that of the whole country will be addressed soon, Deputy Minister of Finance Dr. Maung Maung Thein said.
According to latest official figures, contracted foreign investment in Myanmar amounted to 1.77 billion U.S. dollars in the first four months (April-July) of the fiscal year 2013-14, up 26 percent or 370 million dollars.
Contracted foreign investment in Myanmar from 32 countries and regions hit 42.95 billion dollars between 1988 and the end of July 2013.
Sectorally speaking, the power sector took the lead with 19.237 billion dollars, accounting for 44.79 percent of the total, followed by oil and gas (14.372 billion dollars), mining (2.829 billion dollars), manufacturing (2.749 billion dollars), hotels and tourism (1.585 billion dollars) and real estate (1.056 billion dollars).