The second quarter of 2016 ended with unprecedented financial markets upheaval following the decision by the United Kingdom to withdraw from the European Union.
In its latest Asia Regional Snapshot report, real estate firm Colliers said the uncertain future of the U.K., along with Europe, is expected to weigh down the already fragile global economic environment in the coming months (if not years).
Market watchers anticipate that capital “flight to safety” flows will expedite over time to seek out safer havens in non-UK and possibly non-European investments. As a result, Asian markets and its real estate sector are widely tipped to be one of the main beneficiaries of “Brexit”, according to Terence Tang,
Managing Director for Capital Markets & Investment Services for Colliers in Asia.
Antony Picon, Head of Colliers in Myanmar, noted that despite the establishment of the new government, the delay in the formation of the Myanmar Investment Commission that approves all investments in the country has put the related capital inflow and new developments on a standstill. The temporary suspension of more than 200 high-rise projects in Yangon to assess their compliance with the city’s development plan has also weighed in negatively on the situation.
However, there is growing optimism for a positive turnaround with the newly elected government gradually taking shape.
There is increasing interest in the property market for ministry-controlled land, as the right to purchase and invest of the same that are owned by private entities remains prohibitively high for most investors. As the investors await further governmental guidance on the future growth areas of the city, they are making investment selections in more established locations like Pyay Rd and other well-known arterial roads.
The downtown area remains one of the core interest centres, with 63 acres (0.255 sq km) of land, which is within the Yangon Central Railway Station development, being tendered at a price that is estimated to be approximately US$2 billion.
Yangon’s property market may have slowed due to the current uncertainties but could reignite later in the year.