Myanmar real estate news

Weak kyat leaves developers in difficulty

Myanmar real estate news Trapped between a high dollar and a construction slump, contractors are facing difficult times, industry insiders say. Imported construction and decoration-related materials are more expensive because of the rise of the US dollar against the kyat, but a weak market means that new building projects are rare, and sales are low.

Small building companies are particularly hard-hit, says U Yan Aung, general manager of Asia Construction.

“Because the government has launched low-cost housing projects that can be purchased over a 10-year period, the market for unit sales is down, and sales prices have fallen slightly this year. Buyers don’t want homes built by private companies that charge more than the government. We can’t sell on the instalment plan, either.”

The government should act to stabilise exchange rates to rein in rising prices for imported materials, says U Aung Min, director of Myat Min Construction. The Myanmar Central Bank US dollar exchange rate was K1308 yesterday, only K4 away from a record high.

“There has been considerable fluctuation in the dollar rate this year. The price of the dollar is very high now. This is hard for developers like us who have already contracted to build apartments or condos at a set rate several months previously, because so much of the materials used in construction and decoration, including the elevators, are imported from Thailand, Malaysia or China. It wipes out our profit,” he said.

He added, “The lull in construction means developers are less affected by dollar-kyat rate fluctuations. But if the market strengthens, and the instability continues, we do risk losing out.”

Daw San San Nu, Family Construction Materials at Saw Bwer Gyi Kone wholesale market, said almost all construction materials were imported, and subject to price rises when the kyat was weak.

“Only bricks, sand and gravel are produced locally. We can’t produce enough cement. Everything else is imported,” she said.

Quoted from mmtimes.