Property prices in are expected to finally fall into line with that of other countries in the region by 2018 allowing the market be competitive with that of its ASEAN neighbors.
Some measures have already been launched in the country and more will be coming soon to help bring down the prices, Moe Thida, deputy director of the Construction Ministry’s Urban and Housing Development Department said during a recent forum.
More land would be allocated to private construction projects in an effort to boost Myanmar’s supply of office space which is currently lagging. “If the supply of commercial space increases, prices will fall. We are now observing how much land to be allocated for office and commercial development and how much for residential development,” she noted.
Thida believed the high land prices in the country are linked to high demand as well as speculation. The government is trying to curb this speculation through a series of tax measures. “The government needs to monitor land use purposes. We are trying to satisfy demand. We are trying to respond to this appropriately, but still we cannot monitor the process efficiently,” she said.
Low-cost residential construction is another area of emphasis in the country. The Nation reports Myanmar plans to provide 30,000 such units in three years. Local and foreign firms have been invited to join the construction and a new mortgage scheme has recently been launched to increase affordability. There is also a new housing development law in the works that is expected to be enacted soon.
Thida thinks a level playing field for foreign players will help increase private sector participation, something the country will benefit from. Cyrus Pun, Yoma Strategic’s head of real estate and executive director, agreed but added that land availability is important as well.
“Different ministries control land plots in urban areas. An appropriate land allocation policy will be needed. And the government also needs to find out why construction costs are very expensive,” he stated. “Construction in Myanmar is much more expensive than in China or Thailand because most materials are imported. The establishment of more construction-material plants in the country, as well as more private players, could help bring costs down significantly.”
Image: Yangon city skyline via myanmarbackpack.com
