Be wary of rise in land speculation: experts
ONE of Myanmar’s leading real estate industry bodies has warned that speculation is driving up land prices in some corners of the market, as buyers turn to property to make a quick buck.
According to U Than Oo, deputy chair of the Myanmar Real Estate Services Association (MRESA), the high price of gold, a volatile currency market and a fledging stock exchange has some local investors looking toward property as on option to park their cash. This has seen speculators, with no intention of occupying the property, push up the price of land through sales intended to soon turn a profit, he said.
“People are speculating on property now, in my opinion, because they want people to spark the real estate market,” he said.
U Than Oo said he had heard of cases where land price was being inflated by the traders speculating on the impact of development projects that had been slated in the past but were still yet to materialise.
Speculation is emerging in the outer Dagon townships, for example, where agents were betting on the new city development projects – an ambitious plan to build seven new cities around the outskirts of Yangon – that the government has not yet confirmed will come to fruition, he said.
“Frankly, it seems like people from the media are also being exploited by these people,” he said.
People had more money to invest in property at the moment as they were cashing in on their gold holdings while the price of the precious metal was at its peak, said U Than Oo. While betting on a volatile currency was too risky, people were looking to turn a profit on land.
Buyers were currently looking at small plots under K10 million, U Than Oo said.
“And they assume that the prices in real estate will not fall lower than they are now,” he said. “But the influential businesspeople, they are not participating in this speculation.”
Sai Khon Naung, chair of the Yangon Real Estate Entrepreneurs Association (YREEA), agreed that investors were eying the property market again, but said there had not been a huge amount of speculative trading thus far.
“Currently, the market is active but only for property under K10 million,” he said.
Discussion at the Yangon Region Hluttaw about development projects may also be contributing to increased interest, he added.
“I think it takes at least six months or a year for the market to be normal,” Sai Khon Naung said.
But Daw Nilar Kyaw, the owner of Aye Yeik San Real Estate Service business, said small-property trading over the past two weeks had been booming in some areas, as people started taking bets on the future price of small-plots.
“Plots of land from the North and East Dagon myothit townships are being traded so much,” she said. “During the past two weeks, we have not been able to take rest even on Sundays.”
– Translation by Win Thaw Tar