Wednesday, September 20, 2017

Sleepy Dala in property price surge

Quiet township across the river from Yangon sees intense real estate speculation following bridge announcement

A man rides his bike past two vastly different houses in Dala township. Photo: Aung Htay HlaingA man rides his bike past two vastly different houses in Dala township. Photo: Aung Htay Hlaing

It's been a roller coaster ride for property prices in Dala township, across the Yangon River from the city’s downtown. Its rural houses and vacant lots have seen prices rise to become some of the most valuable property in Myanmar in recent weeks, though experts warn it shows early signs of a bubble that could quick deflate.

Although local residents say the township had long been the scene of some speculation in real estate due to its proximity to Yangon, interest in Dala property took off following the announcement of plans to build a bridge from the city some three months ago.

Ma Thit Thit, an agent at Dala Real Estate Agency, said an exceptional 2500-square-foot property has fetched as much as K30 billion (US$30 million) in recent weeks, more than a thousand times what it cost earlier this year, at K18 million.

Realty agent Ko Tin Htun Oo said it is now common for about 20 potential buyers a day to take a serious look at properties available on the township’s market, aiming to cash in on the area’s potential.

“People say that property prices in Dala could be among the highest in the world,” he said.

As soon as people heard about the new bridge, people travelled from Yangon to invest, and local residents sold their houses and land, he said.

The township is replete with rags-to-riches stories, and local residents say many of their former neighbours with land titles had sold their properties, using the proceeds to purchase fancy cars and houses in townships such as Dagon and Thingangyun.

Yet industry insiders warn the high prices many not be sustainable in Dala township. One key issue is that the bridge – the announcement of which did much to foster the burst in speculation – may be years away from completion.

Ko Tin Htun Oo said that if there’s little evidence the bridge is coming, the bubble on the market may quickly burst.

“We hope the bridge will be built one day soon,” he said.

Nevertheless, the market is showing few signs of slowing. The average price for a 1200-square-foot lot near a road in Dala hit K40 million last week, from K26 million a month ago.

Yet not all Dala residents share Ko Tin Htun Oo’s enthusiasm for the bridge.

Shop owner Ma Nilar said the surge in prices pushed up rent for area residents, as new owners took over their land.

Farmers said they expect the bridge to usher in waves of development, pushing them to locate further afield or leave the business entirely.

U Kyaw Aye, a farmer, said he has contemplated selling his land to take advantage of the high prices, but does not know where he would move to or what he would do.