Sales of real estate west of Rangoon have ground to a halt since the regional government suspended plans last week for a massive development project in the area, according to local property brokers.

“We have gone from what was essentially a gold rush to virtually no buyers whatsoever,” a property broker from Rangoon’s Twante Township, Myint Oo, told DVB. “Prices increased exponentially – up to 50 or 60 million kyat (US$50-60,000) per acre –two days after the city expansion project was announced. Now there isn’t a buyer in sight. It is very quiet.”

The property broker said that, despite the lack of demand, new land-owners are refusing to part with their land for less for the amount they paid.

In August, numerous signs offering plots of land for sale were reportedly posted along Twante Highway, and several brokers began advertising their services in the area. Villagers suggested that several of the speculators “looked Chinese,” and that many carried large amounts of cash to offer sellers as deposits.

The rural townships that were scheduled to be affected by the city expansion included Kyi-Myin-Taing, Seik-Gyi-Kha-Naung-To and Twante, all located five to 15km southwest and west of the Rangoon River.

Real estate agent Than Oo claims that the aborted project has destroyed the local property market.

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“This so-called New City project has destroyed the property market in these areas,” he said. “But I don’t think the cancellation will affect the property market in parts of Rangoon that have already been developed, as this market was going rather well before the suspension of the new development. Speculators may have learned their lesson about investing money in projects like this. They will be more careful in the future.”

But farmers within the 30,000-acre perimeter of land earmarked for the New City project – which was to include schools, commercial lots and residential buildings – say they have also been affected.

In an interview with DVB, one farmer who insisted on anonymity, complained that land nearby his farm is now in the hands of brokers or silent partners, and as a result he can’t make irrigation channels for his farms.

Meanwhile, the biggest losers are the new buyers themselves, many of whom have spent a veritable fortune hoping to make a quick profit after the New City development was unveiled.

One such buyer, U Michael, said that if the New City project had gone forward, it would have ultimately affected property prices in central Rangoon as well.

“I believe the majority of buyers and sellers in Rangoon at the moment are ‘influential’ people,” he said. “They buy up many plots and turn them over for a quick profit. But if this new development outside downtown Rangoon had been built, then prices in the city centre would have dropped substantially. Perhaps these influential people wanted the project to be rejected so that property values in Rangoon would remain high.”

On 22 August, the chief minister of Rangoon announced the New City project and said the contract to develop the multi-billion-dollar project had been given to a previously little-known developer. Following widespread criticism and media scrutiny of the secretive deal, the Rangoon government quickly rescinded the contract and announced that a competitive bidding process for the contract would be held.

Then on Friday, 26 September, Rangoon Mayor Hla Myint suddenly announced to Burma’s parliament that the controversial plan would be “put on hold”, and declined to answer questions from reporters.