Govt plan aims at tempering market

Realtors say they welcome government plans to create a comprehensive policy to rein in runaway property prices.

Land values particularly in Yangon and other urban areas have been increasingly rapidly each year since the 2010 political reforms opened up the country’s economy, and some analysts now say local property prices rival developed international markets like Singapore and Los Angeles.

Yet the jump in values is making it difficult for businesses to find locations to operate and for everyday people to buy their own homes, realtors said.

“Property prices are extremely high because of an inequality between supply and demand,” said Shwe Kan Myae real estate agent U Khin Maung Aye.

“Even though demand is growing, the supply side is not keeping up.”

Yangon City Development Commission city planning and land administration deputy head U Toe Aung said different groups of national and local government officials have worked on a comprehensive plan to cool the market since last year.

Officials hope to have the plan in place by 2015, but there are wide range of opinions complicating drafting – a total of five drafts of the plan have been finished so far, he said.

“My suggestion is that the market can be brought under control through taxes, with vacant land facing extra taxes,” he said.

U Toe Aung added there are currently no plans for hard caps on land prices.

Realtors said there are a number of ways to improve the market.

U Khin Maung Aye said the government should be more accommodating when issuing permits to build, particularly in the outskirts, and should not restrict construction based on land types.

“If they gave permission to developers to build on any type of law, and they will implement more lower–cost apartments suitable for more families,” he said.

Prices even on Yangon’s outskirts have rapidly reason beyond the means of many mid- and lower-income families. Realtors contacted by The Myanmar Times quoted a range of prices between K70 million (US$71,795) to K250 million for a 2400-square-foot lot in the outskirts.

Presidential economic advisor U Aung Htun Thet said the focus should be on matching supply and demand to stabilise land prices.

“Part of this is the government needs to implement more and more land for development,” he said.

“That’s one part of controlling prices.”

People need land to live, but rampant speculation has led to lots of investment in property, and little actual construction.

Action can be taken by the government in other areas, such as a strong set of laws for land and condominiums, he said. M ore subdued land prices would have other side effects that are beneficial for the economy.

Myanmar Real Estate Service Association executive member U Maung Aye said property investment is a strong business at the moment, so lots of people are getting involved as brokers, dealers and investors.

“People who have quite a bit of money are active in investing and buying, much more than selling,” he said. As land prices get driven up, there are comparatively few people who can afford it – leaving many without the means to buy a home.


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