One of the prime requirements for any country to have a sound foreign investment is “Infrastructure”. More and more infrastructure is required to cater for and attract more and more investments in a country. One of the major contributors to the property market of any nation are its investors in infrastructure sector.
The economic development of Myanmar has largely been affected by the boom in Myanmar Real Estate. Ever since the country saw a downturn in the automobile industry, Real Estate has caught up in a big way in Myanmar. Although GDP of Myanmar is the lowest among all Asian countries, but Myanmar Real Estate has seen an unprecedented upward trend; all credits to manipulators who keep the land waiting for investors from abroad.
What type of property should you buy in Myanmar?
The land on the outskirts of the city has seen a huge demand in recent times due to the industrial zones that are proposed to be built there soon. Such outskirts can fetch you a good deal since the land in downtown is very expensive.
This appears to be the right time of investing in land on the outskirts of the city rather than in central or downtown plots. Statistics reveal that land in the outskirts of Myanmar has appreciated by 20-30 {7f7b0206ef579875bd35610f3ae29ce6e3e0c5c3578c4c9f1600fbd97b665c0b} in the last decade itself.
Buying vs leasing
A good option for foreign as well as local investors is to lease the property instead of buying it. Location of the property has a huge impact on its lease price. The rent of flats may vary widely with the location of the property. If you have decided to lease a property in Myanmar, here are two things you need to know:
1. While entering into a lease contract, do consider the stamp duty and WHT or Withhold tax. Stamp duty depends on a number of factors such as the denomination of the agreement, amount of lease, type of lease and whether or not the property is located in the city area.
2. There are some circumstances when the party may be exempted from paying stamp duty. For instance, if the party is a government organization, it is not required to pay stamp duty on property acquisition. Notification no. 18/97 highlights exemption from stamp duty in cases of organizations that have a JV (joint venture) with the government.
There are a number of issues that have been highlighted by the real estate boom witnessed by Myanmar:
1. Firstly, this boom has undeniably raised the real estate market prices. Yangon has seen an average of 39{7f7b0206ef579875bd35610f3ae29ce6e3e0c5c3578c4c9f1600fbd97b665c0b} hike in house costs in the first three quarters of the last year. The hotel tariffs have risen by 65{7f7b0206ef579875bd35610f3ae29ce6e3e0c5c3578c4c9f1600fbd97b665c0b} during the same time, which is one of the fastest in the world.
There has been a twofold increase in office rates and the land prices are on such a rapid rise that soon it shall become very difficult for foreign companies to manage development deals.
2. Secondly, unlike multinationals like Pepsi and General Electric who are on a lookout for investment opportunities in Myanmar, there are many other companies that have started focusing on selling their products instead of investing capital in the construction of factories or creating any other assets.
Conclusion
It stands for a fact that prices of properties in Myanmar are going to hike further. This makes us conclude that making investments in the Myanmar real estate are a wise option for people who have sufficient funds to establish a new business.