I HAVE BEEN in the property market for more than six months through my cousin sister who is local business woman and residing in Yangon, Myanmar's biggest city. I told her my budget would be in the range of 10 to 15 million Kyat which is local currency. I heard that there are some building contractors who are selling their flats in advance with little upfront and installment the balance during construction period. Usually people prefer to buy existing/finished flats in order to avoid hidden risks. Some opted to installment scheme due to their shortfall of budget despite they know it is risk involved. How is it going to be risk by installment?
Our local currency is not strong and easily to be inflated or depreciation. As a result, the builder found construction material prices go up by two, three fold within construction period which exceed their master cash flow plan drawn during feasibility stage. When things go against plan, builder's interest fall deepest and hit bottom rock if they are unfortunate enough. In this scenario, most of developer usually stop the project without giving any reason/explanation to its customers who had been invested through installment channel. So what happen if it's surfacing to people?
There is no visible impact at all because those agreement made between builder and buyer are considered illegal. Thus, contractors took this advantage when they are sure the project is going to be lose by stopping it. What customer can do when they are trapped in like that. They just upset and lose their already paid money. Going through legal channel would add further burden by needing them to pay legal fees. Most of the case took long and the end result is not suppose to be reliable. Being corrupted country, the verdict is most likely to go the side who pay more. It's pain to live in such society. In this reason, people usually prefer to buy existing flat despite they might need to pay a bit more compare to those installment flat.
There are other concerns for those who buying installment flats. This is quality of construction material. Since most of customer are not familiar with building knowledge, the builder used cheapest construction material to get most profit available. The builder are most likely to boast with the best quality material when they are marketing before construction start to lure potential buyers. This kind of case is no longer strange to this society which has no exact rule & regulation with regard to property developer to protect customer's right. On the other hand, builder are usually building low cost apartment so that people can afford. Thus, people cannot afford to expect good quality one rather than reasonable one.
The apartment in Yangon are mostly come as a hall-type, i.e, the flat has only one span. The normal width of the span range from 9 ft to 18 ft and length range from 45 ft to 55 ft. The buyer gets plain apartment if he buys a new one. The buyer needs to do further A&A works to suit his requirement according to the budget. Some stays in the plain flat as they can't afford to renovate their flats. For those who doesn't own a flat need to rent from the flat owners and it's not coming cheap as well. Those people who want to rent usually have two options to adopt depend on owner. One is free deposit which come expensive rental fees and another option come cheaper but need to pay heavy deposit.
I am disappointing to be told by my cousin sister that the budget I can afford is not enough to snap a flat in Yangon. She subsequently suggested me to buy a house in home town located in upper Burmese which is much lower in property price. Since my country changed from military rule Junta to democratically elected civilian government, the property market has been shifted so much. The property market price goes up by sky-rocket rate after hefty demand by oversea investor. They are buying a lot land and places with the help of local partners. Local resident can't resist to refuse very good offer made by such local big boys with the back of foreign traders and the property gone crazy.
It's ridiculous thing to see property price goes sky while people are finding very hard to survive their lives. There have been definitely something wrong but there is no sign of control by government. The government is busying with the other things such as privatizing, selling natural gases and precious gems, welcoming foreign investments, etc. The downtown area of Myanmar's biggest cities are acquired by either foreigner or second class citizens. The true Burmese live in far outside town area after selling their heritage land plot and home. Our people are naturally don't know how to do business and lose their asset by time. They are surviving by selling their property and valuable assets. This is not long term solution but they settle like this and it become a fashion in our society.
To be continued.
Our local currency is not strong and easily to be inflated or depreciation. As a result, the builder found construction material prices go up by two, three fold within construction period which exceed their master cash flow plan drawn during feasibility stage. When things go against plan, builder's interest fall deepest and hit bottom rock if they are unfortunate enough. In this scenario, most of developer usually stop the project without giving any reason/explanation to its customers who had been invested through installment channel. So what happen if it's surfacing to people?
There is no visible impact at all because those agreement made between builder and buyer are considered illegal. Thus, contractors took this advantage when they are sure the project is going to be lose by stopping it. What customer can do when they are trapped in like that. They just upset and lose their already paid money. Going through legal channel would add further burden by needing them to pay legal fees. Most of the case took long and the end result is not suppose to be reliable. Being corrupted country, the verdict is most likely to go the side who pay more. It's pain to live in such society. In this reason, people usually prefer to buy existing flat despite they might need to pay a bit more compare to those installment flat.
There are other concerns for those who buying installment flats. This is quality of construction material. Since most of customer are not familiar with building knowledge, the builder used cheapest construction material to get most profit available. The builder are most likely to boast with the best quality material when they are marketing before construction start to lure potential buyers. This kind of case is no longer strange to this society which has no exact rule & regulation with regard to property developer to protect customer's right. On the other hand, builder are usually building low cost apartment so that people can afford. Thus, people cannot afford to expect good quality one rather than reasonable one.
The apartment in Yangon are mostly come as a hall-type, i.e, the flat has only one span. The normal width of the span range from 9 ft to 18 ft and length range from 45 ft to 55 ft. The buyer gets plain apartment if he buys a new one. The buyer needs to do further A&A works to suit his requirement according to the budget. Some stays in the plain flat as they can't afford to renovate their flats. For those who doesn't own a flat need to rent from the flat owners and it's not coming cheap as well. Those people who want to rent usually have two options to adopt depend on owner. One is free deposit which come expensive rental fees and another option come cheaper but need to pay heavy deposit.
I am disappointing to be told by my cousin sister that the budget I can afford is not enough to snap a flat in Yangon. She subsequently suggested me to buy a house in home town located in upper Burmese which is much lower in property price. Since my country changed from military rule Junta to democratically elected civilian government, the property market has been shifted so much. The property market price goes up by sky-rocket rate after hefty demand by oversea investor. They are buying a lot land and places with the help of local partners. Local resident can't resist to refuse very good offer made by such local big boys with the back of foreign traders and the property gone crazy.
It's ridiculous thing to see property price goes sky while people are finding very hard to survive their lives. There have been definitely something wrong but there is no sign of control by government. The government is busying with the other things such as privatizing, selling natural gases and precious gems, welcoming foreign investments, etc. The downtown area of Myanmar's biggest cities are acquired by either foreigner or second class citizens. The true Burmese live in far outside town area after selling their heritage land plot and home. Our people are naturally don't know how to do business and lose their asset by time. They are surviving by selling their property and valuable assets. This is not long term solution but they settle like this and it become a fashion in our society.
To be continued.
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