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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 highly vulnerable due to the ongoing political instability following the military coup in February 2021, which has led to widespread civil unrest, human rights abuses, and a deteriorating economy. Additionally, the country faces significant humanitarian challenges, including internal displacement and ethnic conflicts, exacerbated by limited access to international aid and resources.
First check tells us not to invest in this country. Let's look at more data.
Myanmar will keep growing steadily
Positive
Before buying a property, consider the state of the country's economy.
Based on the IMF's outlook, Myanmar is set to conclude 2024 with a growth rate of 1.5%, which is not bad. As for 2025, the figure we're looking at is 2%.
This steady growth might keep going since Myanmar's economy is expected to increase by 8.8% during the next 5 years, resulting in an average GDP growth rate of 1.8%.
A moderate growth rate in Myanmar suggests a stable and gradually improving economy, which can lead to steady increases in property values over time. This stability reduces the risk of sudden market fluctuations, making it a safer environment for property investment.
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 anticipated to be minimal
Neutral
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 1.0%, which gives us an average yearly increase of 0.2%.
This data shows that Myanmar is expected to have near-zero inflation then. Prices won't rise and then your property investment may not appreciate.As a foreign investor, purchasing property in Myanmar while the currency is low could potentially offer a cost advantage, allowing you to acquire assets at a reduced price in terms of your home currency. However, it's crucial to consider the political and economic instability in the country, which could pose significant risks to property values and the ease of doing business. Additionally, foreign ownership laws and regulations in Myanmar can be complex and restrictive, necessitating thorough due diligence and possibly seeking local legal advice before proceeding with any investment.
Is it a good time to buy real estate in Myanmar then?
Time to conclude !
While Myanmar's economy is projected to grow by 8.8% over the next five years, resulting in an average GDP growth rate of 1.8%, this doesn't necessarily make 2025 an ideal time to buy property. The country is currently highly vulnerable, which can pose significant risks for property investors. Political instability, economic sanctions, and other uncertainties can impact the real estate market, making it less predictable and potentially more volatile than it appears on the surface.
Although a moderate growth rate suggests a stable and gradually improving economy, which might lead to steady increases in property values, the underlying vulnerabilities of Myanmar could offset these benefits. The risk of sudden market fluctuations remains, and the stability that investors typically seek might not be as reliable as it seems. This uncertainty can make property investment in Myanmar a gamble, as external factors could quickly change the economic landscape.
Another factor to consider is the growing but increasingly impoverished population in Myanmar. As the population grows, the demand for housing might increase, but if people are getting poorer, their ability to afford property diminishes. This could lead to a situation where property values do not rise as expected, or rental yields do not meet investor expectations, despite the promising figures reported by sources like Numbeo.
While rental properties in Myanmar currently offer attractive gross rental yields ranging from 13.3% to 16.0%, and inflation is anticipated to be minimal, these factors alone do not guarantee a good investment environment. The broader economic and political vulnerabilities could undermine these positive indicators, making 2025 a potentially risky time to invest in property in Myanmar. It's crucial to weigh these risks against the potential rewards and consider whether the current vulnerabilities might outweigh the benefits of moderate economic growth and attractive rental yields.
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.
-Will real estate prices go up in Myanmar?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.