Myanmar’s Property Bubble

The impact from global negative real interest rates and monetary measures such as QEs seems to have percolated to Myanmar.

From Global Post,

Hoping to set up shop in Yangon? Bring duffel bags full of cash.

You might assume that property in Myanmar, one of Asia’s most impoverished and dysfunctional nations, would rent for a pittance.

But as the long-shuttered pariah zooms towards political and economic reform, it is swarmed by foreign investors speculating that Myanmar’s big boom is nigh. There are now too few hotels and office buildings in the crumbling commercial capital, Yangon, to cope with the influx of moneyed outsiders.

It doesn’t take an economics whiz to guess what happens to property markets with a glut of interest and a paucity of supply.

Yangon hotels that once charged $60 a night are charging $250 or more. The average rental price for office space has surged to $60 per square meter, according to Antony Picon, an associate director of research with the Colliers International real estate services firm.

“I’ve seen a swamp in the middle of nowhere and they’re asking the same thing they’d ask in the center of town,” Picon said. Houses that recently rented for a few hundred bucks a month are going for thousands.

While economic reforms through liberalization has been a good development, unfortunately this has been accommodating the international monetary policies fueled ballooning property bubble in Myanmar.