Weakesses in the new Condominium Law draft should be addressed before the law is passed, according to the Myanmar Construction Entrepreneurs Association (MCEA).
The draft law was first introduced to the Pyithu Hluttaw in November 2012. It was expected to be passed in 2013 but has repeatedly been sent back to the drawing board, as ministers have failed to agree on a number of important points.
MCEA members said that if the law is passed in its current form, it will have limited success in kick-starting the real estate market, which has slowed this year. The association has over 2000 members and is advising the Ministry of Construction on drafting the new law.
Members have now sent suggestions to the ministry, asking to amend specifications on controversial points, such as land ownership and a clause that allows foreigners to buy units, but only on the sixth floor or above. Currently, foreigners cannot own real estate in Myanmar.
“Our association has made suggestions regarding [these issues] and it would be better for Hluttaw representatives to discuss them again, when parliament next opens,” said U Myo Myint, chief executive officer of MKT Construction and a MCEA member.
A number of amendments to the draft law have been debated by the Amyotha Hluttaw and the Pyithu Hluttaw. In May, an updated bill submitted by the Ministry of Construction was revoked because it infringes on the Transfer of Immovable Property Restriction Act of 1987, said U Ye Tun, Pyithu Hluttaw representative for Hsipaw township.
Under the existing law, immovable property cannot be owned by foreigners, who may be imprisoned or fined or both if found guilty. On the other hand, the draft condominium law states that foreigners can buy up to 40 percent of a building classified as a condominium.
The draft law also states that high-rise residential buildings cannot be classified as condominiums if they are built on less than 1 acre of land. This would rule out a large number of projects that many believe should be classed as condominiums.
“If the Condominium Law is enacted in its current form, it won’t help to boost sales. There are many weaknesses,” said U Ko Ko Htwe, vice chair of the MCEA and chair of Taw Win Family Construction.
Off-plan sales of condominium units have slowed this year, leaving some developers without enough funding to complete their projects. Speculators have largely stopped buying, according to real estate industry sources, who believe that sales are unlikely to pick up again until after the general election on November 8.
Rising costs as a result of the depreciating currency have compounded the problem. The kyat has fallen by more than 20pc versus the US dollar this year.
Developers previously said the Condominium Law should have a positive impact on the market, providing more legal certainty, and widening the pool of prospective buyers. However, the draft law fails to address the reality that many foreign buyers already own real estate in Myanmar, said U Ko Ko Htwe.
Source: Myanmar Times