There has been much buzz surrounding the recent economic reforms underway in Myanmar, however the amount of hype surrounding this up and coming nation is overblown. Not to say Myanmar doesn’t have great potential, but the country is currently experiencing a real estate bubble of epic proportions. The Global Post discusses the causes behind the high property demand:
There are now too few hotels and office buildings in the crumbling commercial capital, Yangon, to cope with the influx of moneyed outsiders.
Yangon hotels that once charged $60 a night are charging $250 or more. The average rental price for office space has surged to $60 per square meter, according to Antony Picon, an associate director of research with the Colliers International real estate services firm.
“I’ve seen a swamp in the middle of nowhere and they’re asking the same thing they’d ask in the center of town,” Picon said. Houses that recently rented for a few hundred bucks a month are going for thousands.
Local businesses seeking to expand are also falling prey to the property bubble, said Moe Kyaw, managing director of the Yangon-based Myanmar Marketing Research and Development Research Services. He is flabbergasted that centrally located homes that recently rented for $300 per month have been converted to offices that now go for $6,000.
“I mean, $6,000! How can you make $6,000 worth of money in Myanmar? I really do not know,” he said. “There will be a burst in the bubble soon.”
Picon agrees. “It will be a bonanza for anyone who can put up a hotel very quickly,” he said. As for office space, he predicts the average rent per square meter could average $150 before it sinks back down to a rational price. That would top the current figure in Beijing ($140) and New York ($120), according to stats published by real estate company Cushman & Wakefield.