Lack of foreign investors could dampen Myanmar property market, but local demand intact

Foreign investments in the Myanmar real estate sector are expected to decline in 2021 as a result of COVID-19, but some developers reckon there are opportunities to tap demand from local buyers. “It has been difficult for foreign investors to return to Myanmar in 2020 so there is a possibility that investments in the property sector will be slow next year,” said Myanmar Real Estate Services Association general secretary Daw Moh Moh Aung. Condominium owners who rent out units to foreigners have been particularly affected by the decline in demand, she said. Due to the decline in foreign investments and the number of foreigners entering the market, rental prices of such properties have halved.

Meanwhile, COVID-19 has given those still in the country the upper hand in rental negotiations, which adds pressure to property owners. For international investors, until the free movement of people across borders resumes, the property market will remain very difficult, said Stephen Purvis, Head of Real Estate at Yoma Land. “For the Myanmar real estate market to continue operating, it is important to attract international retail businesses. There is a risk of investors forgetting Yangon and ignoring the city and so, we have to do our best for Yangon to always stay a relevant market,” he said.

While controlling demand and inflation, the country needs to enact laws related with condos fast for foreign investments to enter and to aid the recovery of the real estate sector, said Mr. Purvis, adding that a quick and practical completion of all condo law legislation would unlock foreign private investment in real estate and
quickly move the industry out of the doldrums. U Khin Maung Than, chair of the Myanmar Real Estate Services Association, agreed. “The government needs to enact specific real estate laws as soon as possible in
order to support a gradual recovery in rental prices,” he said.

In the meantime though, some local real estate developers like Yoma Land are taking advantage of the slowing market to expand. “We will be focusing on local buyers and expanding City Loft affordable apartments project to other sites in Yangon. At Pun Hlaing, we shall roll out further phases of The Hills luxury villas and launch a mid-market residential tower targeting another segment of the local market,” said Mr. Purvis. Meanwhile, the opening of its
high-end The Peninsula Residences Yangon project is also targeted to open in the second half of 2022.

While COVID-19 represents a setback for the economy, “people are optimistic, particularly so in Myanmar which has the fastest-growing middle and affluent class in Southeast Asia. They believe in and plan for a future that includes home buying and thus we have sold to local buyers during the COVID-19 period,” Mr. Purvis said. ShweProperty.com founder and director U Kaung Thu Win noted the importance of using technology to help reach local investors. “We need to prepare information – about real estate issues that we are dealing with – to buyers as much as possible. 90 percent of people who are looking for homes use online services, that is why we need to provide information on everything by using technology,” he said. Businesses need to initiate alternative techniques that can expand the market so that potential buyers can easily search the brand of the property services on the
internet, he said. – Translated

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Source: Myanmar Times

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