Thursday, September 21, 2017

In Nay Pyi Taw, building sector defies economic rut

Nay Pyi Taw has been the nation’s capital since 2005 when the government up and moved, leaving behind the commercial centre of Yangon for new tranquillity.

But since then, the move the economic power has begun to shift as well, especially in the lucrative construction industry, where the two cities now inhabit different economic orbits. Yangon, for better or worse, is anchored to the market and thrives or suffers according to the economic climate, while Nay Pyi Taw is command driven – progress is a given and deadlines are certain.

Construction industry players last week confirmed that while Yangon is slowing, Nay Pyi Taw is booming.

“The sluggish nature of Yangon’s property market has nothing to do with Nay Pyi Taw, it’s all about a poor business climate.

“For that to change business needs to improve in Yangon,” said a spokesperson for A1 Construction.

But for work in the new capital, he said construction companies have non-negotiable deadlines.

“There are many amenities that need to be built there still like cinemas, hotels, markets and guesthouses.

“We have schedules that we must stick to,” he said.

U Ko Ko Lay, the director of Three Friends Construction, said delays in Yangon constructions had nothing to do with ongoing work in Nay Pyi Taw.

“The main issue in Yangon is the overall lack of spending power and a slow business climate. But developers who are working here are concerned about construction delays stemming from the new rules and regulations being issued by the Yangon City Development Committee, including those regarding taxation and Building Completion Certificates,” he said.

He added that demand began to fall when the global financial crisis took hold last year, with current demand barely half of what it was at this time last year.

“We can say that the property demand has dropped by 50pc compared with when the crisis started in September last year. We expect that demand will recover in 2011,” he said.

U Hein Zan Aung, the assistant manager of Sai Khaung Naung real estate agency, said there may be less construction firms working in Yangon now with the demand for work stronger in Nay Pyi Taw but this was not affecting demand.

“There are lots of small construction firms in the industry and plenty of building work to be done if the business situation is good. We think that one way of boosting the market is new investment,” he said.