A short piece by Agence France-Presse (AFP) run in the Straits Times
yesterday, buried amidst the big international stories on Syria and the
stand-off in the Philippines and others, caught my attention. The short
piece, titled “Poor and Homeless in Costly Yangon” discussed
how, because of Myanmar’s political and economic opening, and the lack
of quality office and apartment and factory space in Yangon, rents for
any decent property have soared through the roof.
AFP estimates
that land prices in Yangon have risen since 2010, the beginning of
Myanmar’s opening, to as much as $700 per square foot now, far more than
the price per square foot in Bangkok, which is vastly richer and has
twenty-four hour electricity water, and all other modern conveniences.
Other articles have suggested that some properties in central Yangon are
renting for more than $1000 per square foot, more than rentals in
Manhattan.
Conversations over the past three weeks with several executives from
American and Japanese companies that have considered investing in
Myanmar or are indeed investing confirmed for me the unreality of
property prices in Yangon, an unreality I had seen myself too on recent
visits. Some of these properties that are attracting London-type rental
prices are not much more than bare metal and brick buildings that do not
even have regular utilities; much of Yangon remains without
electricity, water, or decent roads. But what is much more disturbing,
and what the article raises, is that the skyrocketing rent is not only
deterring investment and hitting the pockets of expatriate managers
moving into Yangon; the rents are forcing thousands of families out of their simple places in Yangon, as landlords realize they can rent even the most basic apartments or buildings out to new investors for huge sums.
How many people are being pushed out of their homes in Yangon—where
GDP per capita is still only around $1,300—is impossible to estimate,
although the government
has become so concerned about the skyrocketing rents, and the impact on
ordinary Burmese, that it is considering imposing new property taxes.
Although many advisors to the president’s office are not in favor of
this idea, at such an early stage of trying to attract investment,
Myanmar already is running a serious risk of becoming like Cambodia in
the 1990s, where massive investment and inflows of expatriates created
such high inflation for rentals and, ultimately, even everyday
essentials, that huge numbers of average Cambodians were driven out of
the capital.
source: CFR
No comments:
Post a Comment