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Property cycle at trough, turning point in sight, agents say

Property prices in Mandalay have dropped between 10 to 30 percent over the past five years, with steeper falls seen in less populated residential estates, local real estate agents told The Myanmar Times.

After slipping from its peak in 2013 though, the property market could now be at a turning point. “Recent market conditions are looking better than before. If you look at the property market in Myanmar, sales and demand usually move in four-to-five-year cycles,” said U Tin Maung, chair of the Mandalay Region Real Estate Agents Development Association.

The way he sees it, “in some areas, prices have fallen by as much as a third of the property value and it should be safe to assume that the market is now at the bottom of the cycle.” Moreover, with adequate population and income growth, prices should soon find support at the current level.

“Currently, people aren’t buying property to invest but as homes to live in. So, the market should bounce back soon,” U Tin Maung said.

U Wunna Soe, property agent from Poe Lamin Real Estate Agency, agreed. “Compared to last year, the prices in 2018 have fallen by an average of 10pc more,” he said.

The reasons for declining real estate sales include a slower economy, high property taxes and issues involving squatters in certain areas, he said .

In Myanmar, residential properties sold for up to K30 million will be taxed at a rate of 15pc upon sale. Properties worth between K31 million and K100 million will taxed at a rate of 20pc, while those valued at more than K100 million will be taxed at a rate of 30pc.

There are no plans to lower those tax rates or amend valuation methods to bring prices down, according to the regional authorities.

Due to the high tax rates, the number of property sales registrations has fallen to just 621 in 2016-17 compared to 1,603 registrations in 2015-16, said U Tin Aung.

Source: Myanmar Times

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