Although Myanmar remains distinctly off the radar for most property investors, new pro-development economic policies have the potential to take the country’s real estate sector in a new direction, according to the first Yangon market report published by Colliers International Thailand.
“You could say that the situation for investors is a bit like amber at a traffic light, with everybody ready to go after the sanctions are lifted and a new investment law passed,” said Patima Jeerapaet, Managing Director of Colliers.
He noted that land prices in Yangon’s prime locations like Pyay Road are now achieving similar levels as those in Bangkok.
However, “we have been down this route before in the country, only to have the door closed, so there is some caution within the optimism,” he said.
The country is now at the bottom of the ASEAN economic league table, below Cambodia and Laos. However, Jeerapaet believes this leaves more room for reform. “Myanmar was one of the richest countries in Asia in the 1950s, and there is a strong appetite within the country to realise its potential once again,” he quipped.
According to Tony Picon, Associate Director of Research at Colliers, the country’s history over the past 20 years has significantly altered the way investors think about the property market of Yangon, the commercial centre of the country.
“One example is that the most sought after and expensive units of an apartment or condominium are on the ground floor, which is totally opposite from other countries – and for good reason,” he said.
The definition of what differentiates an apartment from a condominium is also unusual and Picon noted that a condo unit in the country “has a lift, whereas an apartment doesn’t, as there is no law defining actual strata title.”
The next 12 months will be critical for Myanmar, as it is expected to pass investment laws that could lead to a pro-development growth model based on export-led manufacturing. New finance regulations are being planned and they are expected to bring the Kyat currency rate in line with the market rate and allow operations in what is essentially a cash-based economy.
All these factors could result in more property investors taking a serious look at Myanmar.
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