DICA: Real estate records second highest FDI share of over US$600 mln

Low-cost apartment buildings in Dagon Seikkan Township.   Photo: Phoe Khwar
Low-cost apartment buildings in Dagon Seikkan Township.  Photo: Phoe Khwar

The real estate sector recorded the second-highest share of foreign fund inflows at US$601.95 million from five enterprises in October-February period, according to data released by the Directorate of Investment and Company Administration (DICA).
Over the past five months, the manufacturing sector has absorbed FDI of $432.746 million from 107 projects in the current fiscal. The livestock and fisheries sector has drawn three foreign investment projects worth $15.5 million. The power sector has raked in $102.4 million from six projects. One project worth $145 million has been approved in the transport and communications sector. The hotels and tourism sector has pulled in an investment of $29 million from two foreign enterprises. Over $24.85 million in FDI has been pumped into the other services sector.
Domestic investments from 89 enterprises in the real estate sector have reached K4,673 billion so far. More than 22 per cent of domestic investments made by Myanmar citizens have flowed into the real estate sector, according to the DICA.
Realtors are expecting the reduced income tax to stimulate the realty market, which has been cool for the last three years. They also anticipate the approval of a real estate service law, which would regulate informal deals and prevent buyers and sellers from being defrauded by unscrupulous realtors, according to real estate officials.
Owing to high appraisal and tax rates, buyers and sellers have been forced to avoid paying taxes. Most dealers are informally carrying out real estate deals using only the special and general power of attorney, realtors said.
The reduction in taxes is likely to persuade traders who evaded taxes in the previous years to pay taxes and make changes in ownership, they added.
For the 2019-2020 fiscal year, the standard land price per square foot in Yangon’s townships has been reduced by 10 per cent compared to the year-ago period, according to the Inland Revenue Department. These prices are used for tax evaluations in real estate sales.
As per the Condominium Law, when a condominium project developed by a citizen or a foreigner is completed, foreigners have the right to own up to 40 per cent of the units. —Ko Khant (Translated by Ei Myat Mon)

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