Emerging Asia can be a tough place for foreign nationals to own real estate. For example, the Philippines constitution bans non-Filipinos from owning land. Non-citizens in Sri Lanka pay more tax when they own any property.
However, there are signs that this might change soon. 2015 will see countries in the Association of Southeast Asian Nations (ASEAN) merge to form a single market.
The establishment of the ASEAN Economic Community, or AEC, is expected to boost foreign direct investment in the Philippines and other untapped markets across the region. As a result, this will pressure lawmakers to amend ownership restrictions.
Foreign ownership laws will come into focus elsewhere in Asia. Debate continues in Indonesia and Myanmar about opening up the countries’ property sectors to international investors.
This should be a sign of relief for real estate agents in Myanmar since lack of overseas investment is one of three major constraints on the property market.
A recent study conducted by House.com.mm revealed that 24% of house hunters and property agents saw lack of external investment as a factor preventing the real estate market from rising.
Growing Foreign Investment in Myanmar
Myanmar has become attractive to foreign investors. Foreign Direct Investment (FDI) grew from US$ 1.9 billion in the 2011-12 financial year to $2.7 billion in 2012-13.
The bulk of this investment went to the energy, garment, information technology, and food sectors according to the World Bank.
In terms of real estate, non-nationals face heavy restrictions on buying property in Myanmar. According to Article 31 of the Foreign Investment Law, foreign investors can lease land for up to a 50-year period.
However, recent government initiatives provide some encouragement for property investors. This includes a draft Condominium Law which would allow developers to sell up to 40% of units on the sixth floor or above to international buyers.
The outlook for property investors is already improving. Fueled by the ongoing reforms, most brokers in Myanmar surveyed by House.com.mm noted a rise in investment lately. Overall, economic development is the biggest driver of foreign investment in Myanmar.
A bustling tourism sector is another reason why Myanmar property is attractive. The Ministry of Hotels and Tourism aims to increase international arrivals to 3.01 million in 2015 and 7.48 million by 2026, presenting a significant opportunity for property investors in the hospitality and holiday rental markets.
Given all the above aspects, and the general low purchasing power of Burmese people, there is certainly enough room for outside investors. Myanmar foreign property ownership should benefit the country as a whole.
UPDATE FOR 2017: Myanmar began to allow foreign property ownership in 2016. With that said, economic and political conditions are not currently ideal. You might want to hold off on investing in Myanmar for now.
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