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Everything you need to know is included in our Myanmar Property Pack
Are you thinking of investing in property in Myanmar? Are you unsure if it’s the right time to take action?
People have differing viewpoints when it comes to market timing. Your Burmese friend might tell you that now is the opportune time to buy property, whereas your colleagues in Yangon may think that prices will soon decline.
At BambooRoutes, when we create articles or update our pack of documents related to the real estate market in Myanmar, we believe that facts and data are more important than opinions and rumors, so we prioritize them.
We’ve done extensive research on official reports and government website statistics, resulting in a comprehensive database. Here’s what we’ve learned, which can provide valuable insights for your decision-making process regarding real estate purchase in Myanmar.
We hope you find this article insightful!
How is the property market in Myanmar these days?
Myanmar is currently a highly vulnerable country
Negative
Stability should be the first thing you look at when you want to invest in real estate because it greatly influences the success of your investments. It is an information you need as a foreigner who might buy a property in Myanmar.
Unfortunately, Myanmar does not possess the stability required to be classified as a stable country today. The last Fragile State Index reported for this country is 100, which one of the lowest scores in the world.
Myanmar is currently a highly vulnerable country due to the long-standing political and economic repression by the military government, as well as ongoing human rights abuses and displacement of ethnic minorities. This has resulted in a lack of access to basic services and resources, making the population highly susceptible to poverty and disease.
First check tells us not to invest in this country. Let’s look at more data.
Myanmar is on track for significant expansion
Positive
Before buying a property, consider the state of the country’s economy.
Based on the IMF’s outlook, Myanmar is set to conclude 2023 with a growth rate of 2.6%, which affirms the country’s positive direction. For 2024, the figure we’re looking at is 2.6%.
Besides that, the economy will keep growing since Myanmar’s economy is expected to increase by 11.8% during the next 5 years, resulting in an average GDP growth rate of 2.4%.
The expected sustainable growth rate in Myanmar indicates that the economy is growing steadily, which is beneficial for real estate investors as it provides a stable environment for investments. Furthermore, the increasing demand for real estate in the country as a result of economic growth creates potential for profitable returns.
However, there are other indicators to watch.
Myanmar’s population is growing but getting poorer
Negative
Population growth and GDP per capita are important factors to consider when buying real estate because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Myanmar, the average GDP per capita has changed by -9.5% over the last 5 years. It is a concerning and unsettling statistic. However, the Burmese population is growing (+3% in 5 years).
Rental yields are exceptional in Myanmar
Positive
If you’re curious about the potential profits of a property investment, review the expected rental yields.
Rental yield is the indicator of the rental income potential of a property, showing how much you can earn compared to the property’s worth.
According to Numbeo, rental properties in Myanmar offer gross rental yields ranging from 13.3% and 16.0%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Myanmar.
It ranks among the top in the world.
Everything you need to know is included in our Myanmar Property Pack
In Myanmar, inflation is expected to soar
Positive
In two words, inflation is when values surge.
It’s when your go-to plate of mohinga costs 4,500 Burmese kyat instead of 4,000 Burmese kyat a couple of years ago.
If you’re contemplating investing in a property, high inflation can offer several advantages:
- Property values have a tendency to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
According to the IMF’s estimations, over the next 5 years, Myanmar will have an inflation rate of 37.9%, which gives us an average yearly increase of 7.6%.
This data shows that Myanmar will probably experience strong inflation. If it’s the case and you buy now, then there is a possibility that the value of the property may increase over time, potentially allowing you to sell it for a higher price and make a profit.
Is it a good time to buy real estate in Myanmar then?
Time to conclude !
Considering the prevailing conditions, 2024 might not be the most suitable time for property investment in Myanmar, given the array of concerning signals. Despite the potential for significant expansion, several factors raise caution. The anticipated soaring inflation could lead to eroding purchasing power, potentially impacting the property market and making it less attractive for potential investors.
While exceptional rental yields in Myanmar offer some potential appeal, these must be weighed against the broader context. The country’s vulnerability and uncertain political and economic landscape introduce heightened risks that could influence the long-term viability of property investment.
Moreover, Myanmar’s current situation as a highly vulnerable nation further dampens the investment outlook. Ongoing instability, coupled with the expected rise in inflation, could lead to decreased investor confidence and a less favorable environment for property ownership.
Another notable concern is Myanmar’s growing population, coupled with declining prosperity. This combination of factors suggests that even though there might be population growth, the economic challenges faced by the populace could impact housing demand and overall investment prospects in the property market.
In conclusion, the combination of favorable and negative signals in Myanmar underscores the complexities of the investment landscape. While there are promising aspects such as projected expansion and exceptional rental yields, the potential impacts of inflation, vulnerability, and deteriorating population wealth suggest that 2024 might not be the most opportune time for property investment in the country.
We hope this article has offered you practical support!. If you need to know more, you can check our our pack of documents related to the real estate market in Myanmar.
Crd :: https://bambooroutes.com