Property prices crash in Mandalay as tax bites 

Source: The Myanmar Times, October 3, 2018

Real estate agents in Mandalay said property prices in some of the region’s less populated areas have fallen by half and transactions are almost non-existent. Due to unexpected currency fluctuations, interest in the property market has dropped drastically and property agents are now focusing on properties below K100 million rather than higher-value deals, said U Wanna Soe from the Phoe Lamin Real Estate Agency. Due to speculation on Mandalay’s property market, real estate prices surged some seven years ago before stabilising again. A new tax law enacted in 2016 dampened the market further. Under the new law, transactions on property values up K30 million are taxed 15%, from above K30 million to K100 million 20%, and above K100 million 30%. Because of this, transactions on properties valued above K30 million became noticeably fewer.

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RESEARCH VIEW

As Colliers sees it, Mandalay Region continues to pose a strong potential for growth in the approaching years. In fact, there are upcoming plans for a new resort city and a national park that are in its early stages. There has been five FDI projects worth over 13 million dollars approved which connotes future expansion of the urban areas within the region. As the impending developments progress to later phases, more developers and FDI will follow suit with the land values in the adjacent areas rising. Therefore, the current correction in property prices may deem attractive for investors who wish to invest or develop later.

Consortium set to build 12 story high-rise in Yangon

Source: Mizzima, October 8, 2018

Myanmar Pharmaceutical Industrial Enterprise (MPIE) and a consortium of two local Myanmar companies and a Japanese company on Saturday signed an agreement to build a high-rise structure on the land owned by MPIE in Tamway, Yangon, Xinhua reported quoting state media. The consortium, named NSKRE Residence (Myanmar), involves the Japanese company of Nippon Steel Kowa Real Estate, and two local Myanmar companies Mann Myanmar Family Ltd and Asia Business Solution Co Ltd. Under the 50-year land lease agreement signed on Saturday, the 12-storey structural building will be constructed under the build-operate-transfer (BOT) system and is set to include 230 apartments, a fitness centre, a mini-mart, restaurants, business offices and a car parking lot. 

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RESEARCH VIEW

In recent years, the presence of Japanese firms and investors in Myanmar has been rising, underscoring the growing investor confidence within the country’s economic climate. The liberalisation of restrictions on foreign trading continues to stimulate investors’ interest while fuelling the demand for retail and office spaces. The supply stock for retail, serviced apartment, condominiums, and offices are expected to grow by record numbers within the next three years as the number of mixed-use developments increase. The introduction of the development mentioned above will directly impact the supply across the various segments in the future. Colliers urges future developers to recognise the potential demand for the lower to mid-market segments as most of the residential complexes in Yangon are upper-mid to luxury projects.

Myanmar calls for using Myanmar language on product packaging

Source: Xinhua, October 7, 2018

Myanmar calls for using Myanmar language on product packaging

Source: Xinhua, October 7, 2018

The Myanmar Ministry of Commerce has called for using the Myanmar language on products' package along with other languages to ensure consumers' safety. The Department of Consumers Affairs of the ministry recently instructed that all businesses must provide information and guide on their products with direction for use and storage, side-effects and allergic reaction information. The authorities set a six-month period for businesses to comply with the official notification, warning of severe measures to be taken, including banning the distribution of products if not following the instruction. Director of the department U Swe Tint Kyu said the official notification was released with the aim to protect consumers, reinforce the accountability of producers and distributors, and gain trust from consumers over the goods either exported or imported from abroad.


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RESEARCH VIEW

According to UNESCO, Myanmar has a literacy rate of 75.55% for those above 15 years which is ranked 109th in the world. The public education system primarily focuses the Myanmar language.  Therefore, the population of the country who are literate speaks primarily in Burmese with only a miniscule fragment of the country being fluent in English. Therefore, the ability for an individual to decide the safeness of the products and food they encounter is solely based on what the retailer knows. Compliance with DICA’s official notification will not only be beneficial for the consumers, but for the corporations as well. The addition of Burmese labels on products will allow companies to target segments that have not been reached before, while allowing them to be able to understand consumer behaviour in order to create effective marketing campaigns and forecast demand more accurately.