Yangon’s priciest homes are most popular with people looking to use part of the property for commercial purposes, real estate agents say. This five-bedroom home on a 9000sqft plot in Mayangone township is on the market for K800 million. It is listed with the Moe Myint Thawdar real estate agency. Pic: Lwin Maung Maung

YANGON’S high-end property market remains in the doldrums as those with money to burn opt for quicker returns from cars and gold than from property investments, real estate agents said last week.

U La Win Tun, marketing manager for Asia Land Real Estate Services, said demand for housing in Yangon was mainly centred on cheap and mid-range properties.

“There is less demand for homes that cost more than K400 million or K500 million. Even though there are still sales of houses in this price range, it’s much lower than for low-cost homes.

“Investing in massive properties that cost K900-1000 million is only for a very few people with a lot of extra money. Otherwise, apart from some people who use them for business purposes, most people can’t afford homes like this,” he said.

Yangon realtors said most luxury homes were being bought by people with the dual intention of using them as residences as well as for business activities, such as to hold a company showroom or divide into office space.

U Aung Ko Win, marketing manager of the Unity real estate agency, also said the majority of the city’s most expensive homes were being bought by people active in the business community.

“One thing they look for is that the property is located on a main road, which offers better opportunities for business,” he said.

The most active parts of Yangon for upmarket properties are Bahan, Mayangone, Kamaryut and Yankin townships, agents said.

A major reduction in property sales tax last month has injected some new life into the real estate sector, although realtors said they were still waiting for a clear sign of improvement in the luxury property market.

“The high-end market is becoming a bit more active again and, as a result, hopefully we’ll see more people spending money on expensive residential properties in the future,” one agent based in downtown Yangon told The Myanmar Times on condition of anonymity.

On August 12, the Ministry of Finance and Revenue told government officials that property sales taxes had been reduced from 50 percent to 12pc for homes valued over K5 billion and cut from 50pc to 15pc for properties valued below K5 billion.

While there are no known residential properties on the market currently asking more than K5 billion, the move actually makes a home costing K4.9 billion more expensive to buy than a K5-billion home once sales taxes – K735 million and K600 million respectively – have been factored in.

In June, in a move away from market economics, the government announced committees would be set up in each township to determine a property’s value for tax purposes. The committees are to be headed by local Inland Revenue Department officials and include members of the police force and other government departments.