Long-term lending provides relief to home seekers
The residential property market in Myanmar is likely to remain flat until 2020, although the introduction of long-term home loans have provided a salve to buyers, experts tell the Myanmar Times.
Due to weak demand, property transactions in the country have been halved from their peak five years ago, the Times noted.
“This is the current situation. However, what is good is that there will be no worsening in the conditions or a downturn. We cannot say precisely whether the market will climb in 2020 as a lot depends on the policies of the government,” U Myo Myint, general secretary of the Myanmar Construction Entrepreneur Association, was quoted as saying by the Times last week.
The depreciation of the kyat relative to the US dollar has raised the cost of construction nationwide. Affordability levels have been impacted as property prices reflect the continued strength of the greenback, U Myo Myint added.
The introduction of long-term home loans by private and government banks over the past year has provided some relief to the Myanmar middle class, however. The loans especially fuelled demand for apartments priced between MMK20 million and MMK120 million (USD13,120-78,740), according to property portal founder U Kaung Thu Win, adding that “there were almost no apartments left to sell” in this pricing category.
However, buyers face difficulty with the high interest rates on loans, observed U Myo Myint. “It is acceptable that taxes are collected on the initial payment for a home but taxing again on purchases with a bank loan is like hindering people from buying homes. Such tax rates should also be relaxed.”
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