Developers hope Condo Law brings life back to market

Published on July 17, 2015 at Myanmar Times NewspaperWritten by Tin (Rubynar) Yadanar Tun

DEVELOPERS are pinning their hopes on completed Condominium Law this year to jumpstart the quiet property market.

Foreigners are currently barred from buying condo units, though a draft of the law has said foreigners would be able to purchase units on the sixth floor or above, up to a maximum of 40 percent of the building.

The Condo Law has been repeatedly delayed since 2013, though, and experts say they now hope to see a final version before the end of the year.

The law contains more than 60 main points, but many of them are still under discussions, according to Myanmar Real Estate Services Association president U Khin Maung Than.

The most significant of the 60 points is likely the one which allows foreign ownership.

“We hope that, because foreigners will be able to own apartments, the real estate market – especially around condominiums – could liven up,” U Khin Maung Than said.

U Tin Tin, owner of Royal Smart construction company, said passing the law would invigorate a quiet market, but also provide protection and security to buyers.

Industry scandals have marred the pre-sale market, hurting the market.

“If the law comes out, it will help people feel safe about their property, leading the condominium market to be prosperous again,” he said.

Industry insiders say potential buyers cannot simply rely on the law, but must do their own due diligence with developers before making a purchasing decision. Potential buyers ought to ask for approval permits from Yangon City Development Com-mittee, along with any conditions, as well as the status of the land title.

Still, the law is set to shake up the business. The government will take a large step with the legislation, moving from banning foreign ownership to allowing a significant percentage of real estate to be sold to non-Myanmar people.

Urban planner U Kyaw Latt said that under the new law, up to four of every 10 apartments can be sold to a foreigner. However, just because foreigners will soon be able to buy property does not mean they are rushing to do so.

“Foreigners who are keen to own properties in Myanmar are taking a ‘wait and see’ position as they look forward to the announcement of the new condominium law,” said Daw Khaing Mi Mi Kyi, deputy general manager of Capital Development, the firm behind Gems Garden Condominium.

“Currently, a small number of foreigners investing in Myanmar purchased property under their locally incorporated companies’ or spouses’ name.” Daw Khaing Mi Mi Kyi said Gems Garden Condominium buyers are locals, though she has seen interest from Yangon-based foreigners.

A majority originate from Asian nations, though Americans, Italians and British people have also made enquiries. However, owning property in Myanmar is quite challenging, while there are other general concerns around the ongoing political and economic reforms taking place, she said.

Daw Khaing Mi Mi Kyi notes that many construction projects launched recently have made little progress and that prices are impacted by property location, product offering and who gets hired to help with construction.

“Obviously, the potential foreign as well as local buyers would shy away from overpriced projects when they start comparing them with those of more established neigh- bours,” he said. AS the market for condominium developments in Yangon becomes increasingly crowded, developers are looking at other locations across the country for opportunities to build new projects.

In Yangon, the skyline is changing quickly as developers race to build high-end condominiums, but elsewhere in Myanmar, the pace of growth has been much slower.

Mandalay’s first condominium was built by Mann Myanmar Construction in 2013. Apart from this, there were no high-rise condominiums anywhere in the country, including in Nay Pyi Taw, until last year.

However, since late 2014, a handful of companies have made plans to build high-rise projects in several towns. If the projects go ahead, these high-rises will become the first in their respective regions.

On May 23, Hong Kong-based company H&Co held a launch event in Yangon for a US$200 million luxury housing project called Platinum Pathein Condominium, which will be built in Pathein, Ayeyarwaddy Division.

“We hope to transform Pathein into an international city. We also have many plans to develop real estate projects in other townships across Ayeyarwady Region,” said an H&Co spokesperson.

The Platinum Pathein Condominium will be built on 18 acres of land. It will include 26 villas, three condominiums with a total of 410 units, as well as a shopping centre, a cinema and hotels. Each apartment will be priced at around K100,000 (US$92) per square foot.

“When we launched in Pathein we had pre-sold around nine units, and there is also some interest from prospective customers in Yangon. Yangon real estate is a new market for us,” said Ma Hla Yamin Phyu, from the project’s marketing department.

“Pathein is in a region that needs more development, and it is in a good location with good access to other regions. For example, people must pass through it to reach Myanmar’s popular beaches such as Chaungtha and Ngwe Saung,” said the H&Co company spokesperson.

Nan Htike Shwe Sin Company is building the first high rise building in Shan State, to be located in its capital city, Taunggyi. The 16-storey con-dominium, which will have 48 units, was launched in December 2014.

“Executive condominiums are being built in the major cities of Myan-mar’s regions and states since 2014,” said chairman of Nan Htike Shwe Sin, U San Linn.

“However, although high rises are being built outside of Yangon, residents in other cities have not bought units. The main customers for these condominiums are Yangon residents,” he said.

He added that Taunggyi residents are still considering whether or not to buy units, as they are not familiar with condominium culture.

“They are worried because there is no grant lease, like when they own a house. But Yangon residents are familiar with condo culture, and are very interested in buying, because the price of one unit is around K200 million. This is half the price of a condo in Yangon,” he said.

Taunggyi may become the fourth city of Myanmar, so the company in-tends to build more condominiums there, said U San Lin.

Nay Pyi Taw’s first condominium is being built by First Myanmar In- vestment in collaboration with lighting company Krislite. The two-tower, 10-storey development will include 114 apartments, a car park, swimming pool and retail plaza, as well as an outdoor infinity pool, lounge, gym and playground.

“Yangon sales started on the 20th of March, and Yangon customers are more interested in the apartments,” said an FMI spokesperson at the time.

Yangon real estate agents said that the condominium market in Yangon is overcrowded because there are so many projects under construction, and that there are other opportunities for property investment in other developing townships across Myanmar.

“In the towns where condominiums are being built, the property market will improve once the pro- jects are complete,” said real estate agent Ko Htun Htun.

H&Co also has plans to build a new city in Ngwe Saung for the tourism and business sectors in 2017, which will need around $1 billion in investment.

A construction worker is straped in for some high-rise work. Photo: Zarni Phyo