Market prices have collapsed west of Yangon after region officials shelved controversial plans for a massive city expansion in the area.
“There are no more buyers,” said U Hla Chit, a broker who had chased opportunity to the area. “The market has totally stopped and farmers are quiet about selling the land, and local brokers have no more clients.”
Land prices have declined by about 50 percent since Yangon Mayor U Hla Myint told a special session of the Yangon Region Hluttaw on September 26 the regional government had decided it needed more time to study the US$8 billion plan and whether it was viable.
The project had come under criticism almost immediately after being announced without prior notice in August. Speculators, though, had sensed opportunity, rushing in and bidding up local prices. Some reports have claimed land cost as much as K1 billion (US$1 million) an acre, though the agents told The Myanmar Times it had cost up to K170 million if it had road access.
The decision to shelve the project indefinitely has been likened to an earthquake among the speculators, who in some cases are now stuck with land worth significantly less than what they paid for it several days ago.
“After the project was finished, some buyers are selling at a loss of up to K25 million, and some dealers can’t even sell their land – despite investing in it heavily,” said Ko Min Min So, an agent from Mya Pan Tha Khin real estate.
Brokers claim they made out well during the speculation frenzy.
U Hla Chit said brokers were able to generate business from the local farmers and villagers, who had little experience in property. He added the agents were charging between K200,000 and K10 million for each deal they brokered.
Now, however, business has turned sour, he said.
He claimed many of the buyers were Chinese and Korean businesspeople, adding he reckoned about 10,000 acres of the proposed 30,000 acres new city site changed hands after the project was announced.
Agents also claimed that foreign buyers had begun purchasing land in the area in the advance of the new city announcement, apparently aware it was coming and hoping to cash in on the expected price boom.
An agent with Tawwin Nan real estate said over the past three years, buyers from two companies in particular had been snapping up land for as little as K3 million an acre.
Local villagers also say they had similar experiences, though the price had risen to K50 million an acre by last year.
“They persuade us to sell, and we signed the land over, and shortly after, out came the new city project,” said U Win Myint, a resident of Tamarkaw village in Twante township.
Although the apparent end of the new city scheme may have stopped hopes for local development, other residents say the area still has plenty of potential.
“All we need is a bridge over the Hlaing river and the area will develop,” said local resident Ma Han Soe.
The area of the new city project – to the southwest of Yangon city – is near Dala township, which saw a similar property price spike. Last year, an announcement of a possible bridge across the Yangon river set off a speculation wave, though interest waned as a year passed without any sign of the bridge actually being built.
“Prices in Dala in some cases jumped from K3 or K4 million an acre to more than K100 million after the bridge project. But after the project petered out, the property market was stuck with high asking prices and no one buying,” said U Khin Maung Aye, senior agent at Shwe Kan Myae real estate.
Although the new city scheme may have been poorly implemented, developers say they are keen to see Yangon’s outskirts witness development.
“The outskirts are getting the same nice infrastructure as the city. Some of the lands are just being used as a playground for property dealers, and the government should look to lower prices for lower-income people in these areas as well as providing good infrastructure,” said U Yan Aung, general manager of Asia Developing Company.
Source: MYANMAR TIMES