Some veteran estate agents in Mandalay said they would rather see a steady market, when the new government takes office next year, than surging prices.
Property sales have been subdued across Myanmar’s major cities this year, with only the rental market performing.
In Mandalay, real estate speculators took control of the market in late 2011 and prices soared, leading to an impasse in which buyers saw property as too expensive, and sellers hoped for even higher prices.
“Generally, people think prices will soar when they see an active market. Actually, a good market is not just related to surging prices. It’s good if it goes steadily,” said U Wanna Soe from Phoe La Min real estate agency in Mandalay.
Of the many tasks for the new National League for Democracy-led government, U Wanna Soe believes establishing a strong rule of law will take priority.
Once this is in place, there is much potential for foreign investment, he said. “Prices can’t fluctuate so much if policies on land and property are stable and clear.”
Over the past 25 years, Mandalay’s real estate market has experienced dramatic fluctuations, particularly in 1997 and 2011, he said.
Speculators can sow chaos, leading to a freeze in sales, said estate agent U Aung Win. When this happens it is hard to predict when the market will return to normal.
“When the market runs into chaos as a result of speculation, it’s hard to control. For a while, transactions are good and buyers and sellers can agree on pricing,” he said.
“But when sales suddenly dry up, it pushes those who bought at a high price into a corner. They can’t sell at a discount, so the market cannot return to normal.”
The year the government relaxed taxes to be paid by buyers. Under new rules, 3 percent tax must be paid on property valued at less than K100 million, 5pc on sales worth between K100 million and K500 million, 10pc for sales between K500 million and K1 billion, 20pc for sales from K1 billion to K1.5 billion, and 30pc for sales over K1.5 billion.
Previously, 3pc tax was payable on sales worth less than K50 million, 10pc on sales between K50 million and K150 million, 20pc on sales between K150 million and K300 million and 30pc for any transaction worth more than K300 million.
Source: Myanmar Times