Experts call for stronger property laws in Myanmar

MYANMAR’S real-estate market would become more buoyant if regulations on pricing and related issues were to be strengthened, experts said recently.

At the “Property Report Congress Myanmar 2016”, developers and bankers urged the government to improve infrastructure and regulatory reforms.

Tony Picon, managing director of Colliers International Myanmar, said the country needed to control property prices and concentrate on affordable housing.

“An apartment worth US$30,000 [Bt1 million] in Thailand covers around 30 square metres, but at the same price in Myanmar it covers about 15 square metres. We have to look at the actual price that we can afford – whether it is 20, 30 or 40 thousand dollars – and that has to change,” he said.

Picon urged the government to put more emphasis on affordable housing for salaried workers.

Developers should consider affordability for a lower-end market for office workers to secure their housing, he said, while also underscoring the importance of location for affordable housing.

Currently, most of the affordable housing is situated far from the city centre, where many company offices are located.

He considered transportation to be a serious issue for office workers.

“If you don’t have a car, how do you get to the bus stop to get on a nasty horrible bus, sit for another two hours waiting at the back of the traffic on the way to your office. That makes a huge difference in whether people want to live there or not,” he said.

Picon added that Myanmar’s parking regulations were really hurting the condominium market.

“Under the existing parliamentary regulations, condominiums must have 1.2 parking lots per unit. I think that is crazy. Every other country and city in Southeast Asia has completely different parking restrictions. They allow smaller unit sizes to be developed. Here it’s obvious that parking space is a problem with 1.2 lots per unit, as that means it is very hard to make a project feasible with smaller units,” he explained.

In his opinion, Myanmar should find ways to ensure that office workers have access to finance so that they can buy their own property.

“Myanmar needs to deal with outside of the financial area. They have great a banking system, but what is missing here is proper regulations [for access to finance],” he said.

The Colliers MD said that in Thailand, low-cost housing usually started at around $30,000 per unit, but salaried workers who earn $500 to $1,000 a month could get bank loans.

Several commercial banks in Myanmar are still reluctant to lend to individual buyers for fear of losing money, as the property they want to purchase is still not counted as collateral.

Credit bureau planned

However, a credit bureau is being planned, where commercial banks can check individual borrowers’ financial status.

Kim Chaw Su, chief financial officer of KBZ Group, welcomed the government’s move in regard to establishing a credit bureau.

“If we are having a credit bureau, we need to make sure that we have the right type of criteria that will connect from every single agency or bank, to make sure that we have a pool that we share. I think there will be some concerns about having the right kind of information. How do we make sure whether that information is actually accurate?” she said.

“The banks that collect the information will also need to go back to their customers to verify the information,” she added.

Kim Chaw Su underscored the need for more regulatory reforms, commenting at the congress that many regulations were pretty old – and that only some had been recently updated.

Tax relaxation is also crucial to banks, so that they can extend more loans, she suggested.

Hal Bosher, chief executive officer of Yoma Bank, said Myanmar needed to address structural issues very urgently. In his view, it is important to have very developed mortgage mechanisms, while it is also necessary to reform the interest-rate structure.

He added that land, access to land, and the quality of land titles were all extremely important issues in regard to securing credit.

With high hopes for the new government, Azeem Azimuddin, chief financial officer of Aya Bank, said project finance and residential loans would be critical to improving the quality of life for people in Myanmar.


Source: Myanmar Eleven

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