Potential foreign buyers left confused by Myanmar’s condominium law

YANGON: Confusion over a law allowing foreigners to buy condominiums in Myanmar is prolonging a slowdown in its residential property sector, highlighting the challenges of regulatory flux in the frontier market.

The legislation adopted in January last year leaves unanswered questions such as whether it applies to existing apartments, hurting efforts to woo investors.

The outlook now depends partly on bylaws the government is working on to clarify the legislation, according to local developer Yoma Strategic Holdings Ltd.

“We expect the bylaws early this year,” said Yoma executive director Cyrus Pun in an interview.

“It’ll be a big change for the sector. There was a very bullish market from 2011 as the economy opened up and investment came in, but residential property has quietened down quite a lot in the past 18 months.”

The cooling property sector and a dip in Myanmar’s rapid economic expansion have dented some of the earlier investor euphoria for the Southeast Asian nation.

The 2016 law permits 40 per cent foreign ownership of a development, but lacks details such as the exact process for a project to qualify as a condominium.

Mid-tier condominium prices dropped about 41 per cent from 2014 to last year, Colliers International Group Inc data shows, while luxury unit prices slid 22 per cent.

The timeline for implementation of the bylaws remains cloudy. While the rules have been drafted, it’s unclear exactly when they will be sent to Cabinet for approval.

In time, the rules allowing foreigners to buy property could be thought of as a game changer, but they would have little effect on sales in the short to medium term based on current market conditions, said Joshua De Las Alas, an analyst for Colliers International, here. Bloomberg