According to Ms. The Htet Oo, Assistant Manager for Research & Advisory at Colliers International, the number of condominium units launched in Q1 2017 reached just over 550 – almost equalling the same period in 2016 mostly coming from the Spring Line Residence by Shwe Oak Khai Construction. “We anticipate future launches and new phases of existing developments may be delayed due to the continued poor sentiment for this sector, said Ms. The Htet Oo. However, there was a slight uptick in the cumulative take-up rate to about 54% although this was largely fuelled by demand for The Central by Marga Landmark Development. Overall prices remained static in Q1 2017 except for the high-end segment which saw a close to 6% decline.

The surge in activity in condominium launches a few years ago is bearing fruit with an expected record number of newly supplied units to be become available throughout 2017, an increase of around 30% from 2016. As many of these units are expected to be offered for lease for foreign expats and repats, this should further push condominium rental rates down, according to Joshua Delas Alas, Senior Analyst.  

While some limited bank financing options have made some minimal impact, the prevailing conditions for future condominium sales remain weak according to Tony Picon, Vice Chairman of Colliers International. Mr. Picon pointed to the continued wait for the notifications and implementation of the Condominium Law that was passed in January 2016 causing uncertainties regarding legal status especially for foreigners. However, the car parking requirements for condominiums in Yangon amounting to 1.2 spaces per unit will forever severely stunt the sector according to Mr. Picon. “Smaller unit sizes and less bedroom configurations should be becoming market practice as Myanma families start to get smaller and many units are for rent to foreigners looking for small one bedroom units; but the existing parking requirement makes this much harder to be achievable so mostly an oversupply of large three bedroom units will remain the norm”, warned Mr. Picon.

In terms of affordability, large units mean higher prices and many local buyers are being priced out of the market in all segments. “In other countries, new buyers can put their first foot on the property ladder with a 30-40 sqm unit but in Yangon this is virtually impossible”, pointed out Mr. Delas Alas.

The continuing woes for the sector provide positive news for developers of single owned apartments for lease or serviced apartments, which do not have car parking requirements based on number of units. In other markets small condos for rent are a very attractive option for expat renters, but in Yangon they present limited competition for serviced apartments catering for expats looking for small size but good quality accommodation, according to Ms. The Htet Oo.

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