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The city of Rangoon is facing a shortage of suitable housing as more and more foreign investors flock to the country to do business.
In the two years since Burma’s political transition, a slew of foreign businesses have rushed into the country, but many are finding it difficult to find accommodation.
Housing prices have increased in the city, and some of the most expensive prices on the city’s rental property market are three times as much as that of Bangkok and Hanoi, and occasionally higher than even Singapore.
Tony Picon is the managing director at Colliers International in Rangoon. He said that supply for housing simply can’t keep up with the surge in demand for apartments and houses.
“When Thailand opened up, it was Western investors and the Japanese who came in. Now it’s the Singaporeans, Malaysians, Indonesians, [and] Thais who are coming into Burma as well. The oil and gas sector is big here, as well the tourism sector, so it’s almost like a perfect storm in many ways,” said Picon.
The luxury hotel and apartment brand Shangri-La Residences offer 240 units of fully furnished and serviced apartments. A three-bedroom starts at US$7,000 a month. The price is comparatively high for Asia, but almost all the apartments have been rented out, and the project has not even opened yet.
Cyrus Pun, executive director and co-head of real estate at Yoma Strategic Holdings is overseeing a project to build a multi-building complex.
“We have already been constrained in many ways, with a lack of human capacity, capital, credit in the market, and mature legal framework,” he said.
“But I see that all of these are going to improve in the future.”
Perhaps it is the high prices that lure developers to come to the city in the first place. But eventually, Pun admits, Burma will reach an equilibrium.
Burmese government officials approved three times more foreign direct investment this year than in 2012. But officials fear a lack of real estate will deter businessmen from continuing to flow in, and several new government-sanctioned housing projects are in the works.