Foreigners’s ability to own condos has emerged as one of the central issue in the debate over the condominium law.
The much-anticipated condo law has been a work in progress for years, with the most recent draft submitted to parliament in June.
The draft is set to be discussed again by the Amyotha and Pyithu hluttaws early in the new year. There have been sticking points such as the Amyotha hluttaw’s insistence there must be collective ownership, as well as provisions allowing foreign ownership for the first time.
Under the current draft, up to 40 percent of a condo’s total units may be owned by foreigners, provided the units are on the sixth floor or above of the building. Some are pushing for foreign ownership provisions to be removed from the draft law, while others say it is crucial to allow in foreign buyers.
Allowing foreigners to purchase units is likely to drive up property prices, according to U Kyaw Latt, an urban planner from the Yangon City Development Committee. Although he is not involved in drafting the law, he said from an urban planner’s point of view, foreign ownership may not be appropriate.
“Foreigners will buy condo units at high prices and then they will sell them at an even higher price,” he said at a December 12 seminar called Present and Future Yangon. “The buying and selling can be termed ‘dealing’, and the price will increase in the market as a result.”
U Kyaw Latt said allowing foreign dollars to formally buy units may push them out of reach of locals.
There ought to be some restrictions on foreigners buying condos as investment properties, he added.
“If the law allows foreigners to buy any condo, the property market will be in an anxious condition,” he said.
However, others say the country is opening up its economy, meaning it is becoming important that foreigners have the ability to buy condos.
President of Myanmar Construction Entrepreneurs Association U Thar Aye said that if rules allowing in foreigners are scrapped or restricted, the law will not be effective.
“We can see in other countries that foreigners can own condos, with ownership controlled under law,” he said. “If we have a large supply, the price won’t be so high.”
There are other restrictions that could be implemented to reduce the volatility brought by foreign condo ownership.
Ko Htun Htun, an agent at Phoenix real estate agency, said not all foreigners will be buying condos, though enough will that property prices might be higher. If the law does not include strong rules and regulations, it is possible both foreigners and local people will attempt to speculate on the market.
“If they want foreigners to own condos, they might consider restricting foreigners’ control through taxes or not allowing re-sales for five years,” he said. “Different countries around the world use different methods to control prices, from foreign and local buyers alike.”
Source: MYANMAR TIMES
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