Need to Enact Condominium Bylaws to Revive Unit Sales Market

Published on Mar 15, 2017 AT MyanmarTimes Newspaper

Written by Tin (Ruby) Yadanar Tun

To revitalize the currently stagnant condominium market, developers are urging officials to enact condominium bylaws immediately.

Although the Condominium Law was passed in the final week of January 2016, the necessary bylaws have yet to be enacted, leaving the law effectively unenforceable.

U Yan Aung, Managing Director of Asia Construction, noted that the sales market remains depressed because these bylaws are still missing more than 14 months after the law's inception.

"Developers still cannot sell condo units to foreigners, even though the law was passed over a year ago. It should not take this long to draft and enact bylaws. The government must act quickly to stimulate the currently cold real estate market," he said.

Under the Condominium Law, up to 40 percent of units in a building can be sold to foreigners. U Ko Ko Naing, Managing Director of iGreen Construction, explained that many international buyers are waiting for the legal framework to be finalized before committing.

"As developers, we cannot sell to foreigners yet because the law cannot function without bylaws. Some foreigners are waiting for the law to ensure ownership stability. The government needs to enact these rules soon to boost the property market," he said. He added that allowing foreigners to purchase units would further develop Foreign Direct Investment (FDI) and the local property sector.

The drafting of the Condominium Law began under the previous government in 2013 and took three years of revisions in the Union Parliament before being passed. According to parliamentary rules and regulations, the relevant ministry is required to enact bylaws within 90 days of a law being passed. Despite this 90-day requirement, the Ministry of Construction has yet to announce when the bylaws will be officially released.

U Min Htein, Director of the Urban and Housing Development Department at the Ministry of Construction, stated that they are working to finalize the bylaws, which will include detailed regulations for both buyers and sellers.

"Enacting bylaws takes time due to negotiations between government departments and construction-related organizations. We need to ensure the rules and regulations are detailed, and we are trying to finalize them very soon," he explained.

U Ko Ko Naing reiterated that the market is currently "cold" because buyers are in a holding pattern. "Since the law is already passed and the bylaws are expected within months, many buyers are waiting for those detailed rules before purchasing units."

Furthermore, U Aung Min, Managing Director of Myat Min Construction, emphasized the need for clarity within the regulations.

"The government should provide detailed bylaws that clearly state which types of visa holders can invest in condos, how long they must have resided here, or what kind of business they must be conducting. There also needs to be clear regulations regarding Build-Operate-Transfer (BOT) buildings," he said.

He added that the market for high-rise luxury housing in Yangon depends heavily on foreign buyers, as local demand for such units is currently limited.

To truly fix the property market, U Aung Min suggested that bylaws alone are not enough; improvements to the banking system are also essential to facilitate installment plans and allow units to be used as collateral.

"Many local and international buyers are waiting for a better banking system. Currently, expensive condo units cannot be used as collateral for bank loans, unlike grant land. Once the bylaws are enacted, ownership will be more stable, and we hope these units can eventually be used as collateral, just like land grants," he said.