Burma property boom beckons

Thursday, May 24, 2012  ...

Hong Kong people are usually concerned only about articles on freedom fighter Aung San Suu Kyi when reading news about Burma.But this is changing with the West lifting its economic boycott on the country after its military government eased oppression against Suu Kyi about a year ago.

Ever alert to opportunities, Hong Kong people are taking an interest in Burma's economy, and the Hong Kong General Chamber of Commerce has already sent a delegation there.

As rapid development has pushed up production costs in many Asian countries, businessmen are keen to explore the potential of Burma.

Meanwhile, the country is gradually dropping measures that inhibit a free market. For instance, vehicle import restrictions and related taxes have been relaxed, cutting vehicle prices by half.

Last month, the Burmese government also started a new floating currency management system that facilitates cost estimate and control for businesses.

While Burma does not even have a stable power supply now, the situation should improve as foreign investment increases, with the most likely sector being manufacturing.

Investors must take note that real estate prices usually go up when economic development reaches a certain level.

So those who are bullish about Burma should probably consider acquiring property there, ahead of a boom.

In Burma, foreigners are allowed only to rent, but not own land. Permissible lease terms have, however, been extended from only for a few years in the past
, to decades.
Those who have recently been to Burma say property there is not cheap, however. A 2,000 square foot luxury home will cost around HK$2 million.

At nearly HK$1,000 per sq ft, such homes far exceed the affordability of the locals.

But demand for this kind of property, mainly targeting expatriate employees, should go up as more foreign companies set up shop in Burma.

Where there is profit, there is risk, and acquiring property in Burma now is all about the amount of risk one is willing to take. Siu Sai-wo is chief editor of Sing Tao Daily

http://www.thestandard.com.hk/news_detail.asp?we_cat=5&art_id=122723&sid=36480652&con_type=3&d_str=20120524&fc=7