Overview
Serviced apartment is one of the sector of real estate services which is still experiencing which demands are still unmet. Yangon currently has 1300 apartments. Of these, an estimated 50 apartments (less than 5%) are currently available, all of which are studios or 1 bedroom units. The prices are some of the highest in the region with apartments prices starting from $3,000 to $12,500 per month in certain schemes. Approximately 800 new units being constructed and will be delivered in 2017 and 2018. Rapid growth in real estate development and high influx of expats coming in to Yangon and Mandalay drove the growth of professional real estate services but none of them is under control of any regulators. Along with increasing rental rate, paying six months’ or even a year’s rent upfront is increasingly a burden to residential and business tenants. Due to the competitiveness, tenants can ask more tenant-friendly lease terms such as rent free periods, flexible rent payment terms, break clauses and incentives including free parking and discounted service charge fees
Opportunities and Barriers
Rapid growth in real estate development and high influx of expats coming in to Yangon and Mandalay drove the growth of professional real estate services but none of them is under control of any regulators. Professional Real estate services related to consultancy of land and properties ownership and usage will be interested by both local and international expats.
Legal & Regulatory Framework
In the past, the Yangon City Development Committee had a committee to supervise the rental market and deal with rental issues with the Urban Rent Control Act but it was not effective and could not keep up with the expats influx. To streamline the rental, selling and buying properties services for both locals and foreigners, the upcoming Real Estate Service Law make a lot of changes. The new rules and regulations would deal with the lump sum payment scheme. The current arrangements between the landlords and tenants are technically illegal and the new law will hopefully establish accountability of the contracts.
Allowed Types of Investments
Investment businesses allowed only in the form of joint venture with a citizen owned entity or a Myanmar citizen are establishing and sale of residential building and condominium and renting thereof and Building new town (It shall be carried on together with a government body).
Sources
- YANGON REAL ESTATE MARKET 2015 REVIEW, Slade Property Services, February 2016
- Investing in the Myanmar Real Estate Sector, VDB Loi, 2014
