The launch of new infrastructure projects often sees property prices surge in the surrounding area. But prices in Dala township, where a bridge will be built to connect the area to Yangon, were pushed so high in the past by speculation that the market has remain unchanged.
The Korean-funded project was launched in Dala township on February 17, but has been publicly discussed since 2012. The intervening years of delay did not stop a wave of property speculation sending up prices in the quiet township.
But now that the bridge has been confirmed and formally launched there are no signs of another surge – property agents say the market has remained quiet.
The biggest bouts of speculation occurred in 2013 and 2014 following announcements. The government first formally released information about plans to connect Dala township with the rest of the city, across the Yangon River, in 2013.
When the project then ran into difficulties and was put on hold, land prices fell and the new owners were unable to sell their holdings. When the Yangon Region government confirmed last May that it would take on a loan from the South Korean government to build the bridge, property prices spiked again.
Since then, even though property speculation has slowed, asking prices have remained high. Real estate agents said that stubbornly high prices are making it difficult for people to buy or invest in the land following the project’s official launch.
“In the past, the property market surged because of the project, but because prices became extremely high and didn’t go back down that can’t happen again,” said U Khin Maung Aye, a real estate agent at Shwe Kan Myae real estate agency.
Underdeveloped Dala township now boasts property prices similar to townships in central Yangon, which means new buyers are hard to come by, he said.
U Khin Maung Aye said that the price of a 250-square-metre plot of land beside the main road in Dala was around K500 million.
Once the bridge is actually built and the area develops, Dala will become a good investment and the property market will improve, he added, though this is some five years away.
Dala-based real estate broker U Hla Chit said that some of the high land prices are asking prices, and not the price at which land is changing hands. Transaction prices are closer to K60 million for a 2400-square-feet (222 sq m) plot, he said.
This is in line with prices in July 2015, when U Hla Chit told The Myanmar Times that prices in wards other than Kyansit Thar, the most sought-after ward, were around K60 million to K70 million for between 1200 and 2400 sq ft.
There have been few actual deals since the bridge project was confirmed, with no jump in prices and little movement in general, he told The Myanmar Times this week. There are people eager to buy land in Dala township, he said, but owners who bought following the project’s announcement in 2013 do not want to sell at a loss.
Local land owners that were forced to relocate to make way for the project received compensation from the government late last year. At that time those land owners said the price of the land that they received in compensation was worth double that of their old plots.
U Hla Chit said that this was simply speculation, and did not reflect actual transactions.
Quoted from mmtimes.
