Mired in legislative gridlock until the dying days of the outgoing government, the condominium law finally squeaked through parliament on January 22 after years of back-and-forth argument between the upper and lower houses.
The president still has to approve the law, but in principle foreigners will now have the right to buy up to 40 percent of condominium apartments in any given block, provided the apartments are on the sixth floor or above.
Experts say the long-awaited measure could give a much-needed boost to the stagnant property market, as well as bringing in up to US$1 billion in foreign currency, and a healthy tax revenue.
The news will also be welcome to property developers considering developments along Myanmar’s borders – in Dawei, for example, they will now be able to build and sell projects to Thai buyers, and in Shan State to buyers from China.
The bill, drafted by the Ministry of Construction, has been in limbo for the past three years, the victim of a standoff between the lower and upper houses. The Pyithu Hluttaw wanted to let foreigners buy up to 50pc of high-rise apartments, while the Amyotha Hluttaw said the figure should be 40pc. The final bill puts the figure at 40pc, meaning foreign buyers can buy four apartments out of every 10 on sale.
U Khin Shwe, Amyotha Hluttaw MP for Yangon Region, said the new law could cut Myanmar’s trade deficit by up to one-quarter. “The deficit is over $4 billion. Now that foreigners can buy condominiums, that could bring in at least $1 billion,” he said.
Apartment sales could also bring in commercial tax of 5pc. “This is a legal way of acquiring dollars,” he added.
U Khine Maung Yee, Pyithu Hluttaw MP for Yangon Region, said the new law would strengthen the property market. “This will be of great interest to foreign investors doing business here. It will also strengthen our currency, as well as stimulating the market,” he said.
Foreigners are still barred from buying land and houses, said U Thein Tun Oo, MP for Mandalay Region’s Amarapura township. “Foreigners are not allowed to own or manage the land on which the building stands,” he said.
U Khin Shwe said there were about 4000 or 5000 condominium units in Myanmar. “The number of Myanmar citizens who can afford an apartment worth K400 or K500 million is under 1000. Now, foreigners will be allowed to buy the rest,” he said.
The news was a relief for U Maung Maung, chair of Shwe Kabar Construction. “There is no domestic demand for condominiums at the moment and there are many condos to sell, so hopefully sales will pick up,” he said.
Condominium sales have come to a near-halt over the past year after a deluge of off-plan sales were launched in 2014. Without a mortgage market, local demand is limited to a very small buyer pool and demand soon waned. Fear that some developers would be unable to complete their projects, which are funded through off-plan sales, dampened demand further still.
“Local people could not buy all the units in the market,” said U Maung Maung. “Now we can sell them all to foreigners.”
Details of the law will be announced once it is approved by the president. For now, it is not clear whether it will also be applied to existing condominiums, said U Sit Han Kyi who lives in Yangon’s Pearl Condominium, one of the city’s oldest.
“I’m glad the law has been approved, but I’m worried it will only apply to new buildings,” he said.
Translation by Thiri Min Htun
Quoted from mmtimes.
