As Myanmar opens up under new political leadership, its property market somehow isn’t progressing as fast. After years of undersupply resulting in skyrocketing rental prices and hotel rentals, it is now in somewhat of an oversupply situation. Unrelenting demand from MNCs and foreign expatriates has sparked a building boom especially of luxury developments in recent years.
However, there are only this many elite Burmese able to take up such units in this long impoverished country. The rest of the units need to be mopped up by who else but foreigners. But the law with regards to foreigner property buyers is still quite unfriendly.
Foreigners are barred from purchasing or owning condos in Myanmar unless it is structured as a joint venture with a Myanmar native or through a buildoperate- transfer (BOT) lease agreement with the government for 70 years.
In January, the Union Parliament approved a condominium law granting foreigners the right to purchase. It is however full of conditions and many industry players observe that the law still has a lot of room for improvement before it is able to instil confidence.
Meanwhile, a recent Colliers International report revealed that take-up rates during H1 2015 were at an all-time low of 49% while total unsold inventory at the end of H1 2015 stood at 6,654 units – double the figure for the whole of 2014.
Only time will tell as to when it is safe for foreign investors to venture into this last frontier for property in Southeast Asia.
China invests in SEZs in Myanmar
Meanwhile, China has been increasing its investments in Myanmar over the past few years especially in Special Economic Zones. Years back, China has played a key role in developing Myanmar’s SEZs, especially the Kyaukpyu Special Economic Zone. Myanmar has pushed for the development of SEZs in an effort to stimulate growth.
In 2009, Myanmar’s Ministry of Energy signed a memorandum of understanding with China National Petroleum Corp to jointly build an oil pipeline linking the Maday Island in Kyaukpyu and Yunnan province in China. The pipeline, completed in January 2015, was designed to transport oil from the Middle East to China.
Other projects include the construction of a deep sea port on the Bay of Bengal and the development of an industrial area