ASEAN KEY DESTINATIONS
Finding Accommodation Rental market to dominate real estate sector in 2014, say agents
Demand for rented accommodation will be a dominating feature of the real estate market in 2014, say market sources.
“The demand for apartments and houses could rise by at least 60 percent this year over 2013,” Ma May Htet Aung, the managing director of Power 7 real estate and general services, told Mizzima Business Weekly.
Despite the anticipated surge in demand as the number of foreigners moving to Myanmar continues to rise, Ma May Htet Aung said she expected only a slight increase in the cost of rent.
“Property rental prices cannot rise much further because the cost of renting most types of accommodation reached its highest level in 2013,” she said.
One reason for this was projects launched by Myanmar and foreign property developers which are likely to be finished this year. As well as easing a shortage of high-end apartments, the completion of the projects will also see some rental price stability by the year’s end, Ma May Htet Aung said.
“Many foreign construction companies have begun projects in Yangon to build apartments, she said.
“Some of these projects will be finalized by the end of 2014 and the surplus of apartments can reduce rental prices in Yangon to some extent,” Ma May Htet Aung said.
She also welcomed the move for a condominium law, saying the security it would bring to transactions was essential for the real estate industry.
“When condo law comes out, it will result in a safer environment for foreigners who want to buy units as well as resolving negotiation problems in transactions when we [real estate companies] deal with foreign clients and sellers,” Ma May Htet Aung said.
She said 2014 would be another busy year for agents in Yangon. There are nearly 1,000 real estate agents, big and small, and they are trying hard to be more efficient.
“I want the industry to be more transparent in handling transactions with foreign clients and this will be especially important in 2014 as foreign investment in the country continues to rise,” she said.
While the rental market was extremely competitive, demand for property had eased in 2013 because many prospective buyers had adopted a wait and see attitude, said Daw Aye Thinzar Thu, the managing director of I-Home real estate company.
Agents predict that the cooling of demand, which is partly a consequence of the introduction last year of a 37 percent tax on sales, could see increased demand for property at the lower end of the market.
“We hope that demand will increase for low range property priced between 30 million kyats and 40 million kyat instead of 300 million kyat high-end condominiums,” Daw Aye Thinzar Thu said.
She also predicted increased interest in residential property on the outskirts of the Yangon because of a shortage of housing in the expensive, saturated downtown market.
The political and economic climate was also likely to influence the market because it was closely linked to real estate trends, Daw Aye Thinzar Thu said.
The number of residential projects under construction and the enactment of the condominium law and the property taxation act would ensure that the outlook for the real estate market was bright, she said.
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