An escalating number of developers are becoming more cautious towards their projects and sales strategies over recent years, according to the Myanmar Condominium Quarterly Review Q2 2018.

Colliers says this "wait and see approach" has become even more evident as developers seek clarity and further application of the Ministry of Commerce’s (MOC) Condominium Rules into practice.

"Such behavior has affected the volume of project launches," says Colliers.

Related reading: An introduction to Myanmar's real estate laws

Forecast at a glance:

• Demand. Buyers remain aloof in view of the market’s current condition. Colliers recommends developers to rethink their strategies and perhaps reposition their succeeding development phases.
• Supply. No new launches were recorded as of Q2 2018. By end-2018, Colliers projects the annual supply to reach a new record high, totalling to 31 projects ranging from mid to high-end categories.
• Take-up Rate. Citywide take-up rate declined by 2 per cent quarter on quarter. We see a slight recovery in the succeeding quarters given the slim volume of project launches. However, sales may remain underwhelming in the near term.
• Average Selling Price. The average selling price for the mid-tier category rose by 2 per cent quarter on quarter, while the uppermid further declined. The trend is likely to continue as many buyers veer away from high-end and luxury projects.

While a select number of developments have dropped their selling prices, citywide take-up rates slowed.

Despite this, an increase of lower to mid-tier projects is forecast to facilitate growth in sales as these developments translate to a more reasonable unit price.

View condominium developments in Myanmar here.

"However, the high land values along with an onerous car parking regulation make it challenging for developers to justify more competitively priced products. Amendments in the regulation allowing smaller unit offerings is deemed essential in addressing affordability," says Colliers.

"In retrospect, the units launched have significantly plummeted starting in 2016 with more than 1,600 rooms – approximately half the figures recorded in each of 2014 and 2015. However, this quarter, no movements in launches were recorded – a similar occassion witnessed in Q4 2017."

Several condominium projects that were expected to be completed in this quarter have been pushed back, while timelines of developments that were arranged to be completed in the Q2 2018 quarter have been further delayed from six months up to a year.

Click here to view Colliers International Myanmar Condominium Quarterly Review Q2 2018.

For more information or to discuss the report, phone or email Karlo Pobre Deputy Managing Director or The Htet Oo, Manager for Research and Advisory for Colliers International Myanmar via the contact details listed below. 

Source: Colliers International Myanmar.

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