Monday, September 25, 2017

Real estate rush in Twante township

In the eyes of land speculators the stars are aligning for Twante township on the outskirts of Yangon, which is swiftly being linked to the city by new roads and bridges and is located beside a huge new development project, the Southwest New City.

A motorcyclist rides over the bridge across Twante Canal. Photo: StaffA motorcyclist rides over the bridge across Twante Canal. Photo: Staff

The sleepy township depends on agriculture and most of its residents are farmers, planting rice and vegetables.

Yet investors and speculators have been calling local real estate agents in a bid to buy up land, following news that a bridge would be built connecting the city’s downtown area with underdeveloped farmland across the Yangon River.

“Construction of the Bagara Creek bridge will begin this month, as the first step toward development of the Southwest New City,” said U Aung Ko Ko Min of Aung real estate.

The Southwest Yangon New City project is located on an 11,716-acre site bordered by the Pan Hlaing River, the Twante-Yangon Canal, the Hlaing River and the Hlaing Tharyar-Twante Road in western Yangon, according to an announcement in state media last year. It is one of seven satellite towns that the government plans to build to support the city’s burgeoning population which is forecast to swell to 10 million by 2040.

Its development has sent speculators rushing to the area to buy up land in a number of townships around the new city project such as Dala, Twante, Seikgyi Kanaungto and Kyeemyindaing, said realtors, adding that Twanteis receiving the most attention.

“Speculators are firstly interested in land that has been demarcated for the project itself. Beyond this, they prefer land in Twante to the higher priced Kyeemyindaing and to isolated Seikgyi Kanaungto,” said U Aung Ko Ko Min.

“Twante is linked by road to Hlaing Tharyar township [which is connected by two bridges to central Yangon] as well as to Dala township, which will soon be joined to downtown Yangon by a large bridge.”

The bridge, which broke ground in February, will be built with funding from Korea and is slated for completion by the end of 2020, at a cost of US$168.2 million.

Twante will also benefit from the World Bank’s Community Driven Development Project which will link a number of far-flung Yangon townships to the city centre by building transport and infrastructure links, said U Myint Aye, a local real estate agent.

Buoyed by expectations of development the price per acre for land in Twante has risen threefold since the end of last year, to K30 million per acre, estate agents said.

“Nobody was buying land in Twante from mid-2015 when the Southwest New City project was postponed [due to widespread opposition]. Some land investors even sold their property back to farmers at a loss,” said U Myint Aye. “But toward the end of last year, when we heard the project would go ahead, prices began to rise once more.”

The project in its original form was cancelled, after it was awarded to a little-known company, by Yangon’s Mayor U Hla Myint and Chief Minister U Myint Swe without a transparent tender.

Daw Thuzar May, director of Thitsar Myay real estate said that some would-be speculators are concerned it may be cancelled again. “Some are calling my agency and asking for prices, but less than 10 percent of callers are actually buying,” she said. “Some are afraid that the new city project won’t materialise.”

Offer prices depend on whether land is near to the main roads or in villages, said U Aung Ko Ko Min. There are 220 villages and eight urban wards in the township.

“Prices along the main roads are rising because of the transport links but in the villages the prices are still quite low,” he said, adding that he hopes the demand will translate into job opportunities for local people. “We would like investors to buy the land, not speculators.”

Property prices in the area also depend on the designation of the land. Garden land is more expensive than paddy land or farmland, because it can be used for any kind of business, and comes with permission to build. Farm and paddy land on the other hand can be used only for agriculture, unless the buyer is able to secure approval from local and regional officials. Grant land is the most sought-after but is scarce on Yangon’s outskirts.

Investor and speculators are eager to buy garden land and farm land, but tend to stay away from paddy land, though it is cheaper, said Daw Thuzar May.

“Investors who want to build industrial zones or other projects are interested in all types of land. But speculators don’t want paddy land, as it’s too much hassle to change it to garden or grant land,” she said.

U Htun Myint Oo, deputy director of the land and revenue department at the Ministry of Construction, said investors can apply to the agricultural land management department to change the designation of their land.

“If someone wants to change farm or garden land to another type of land, they can apply to the local office, but for paddy land they need to apply to the central agricultural land management department,” he said.

“Changing garden land to permit land takes no longer than six months and doesn’t involve paying any taxes. But changing paddy land is more difficult, as we need to keep the land to provide food for our citizens.”