Po­ten­tial for­eign buy­ers left con­fused by Myan­mar’s con­do­minium law

New Straits Times - - Business -

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

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