New Condo Launches in Yangon Ground to a Halt Last Year

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Developers failed to launch a single new condo project in Yangon in the second half of 2016, as developers went ‘back to the draw­ing board’ in response to weak sales, the real estate firm Colliers Internation­al has said in an update.

It followed a ‘significant’ drop in new sales launch­es in the first half of the year, with only five new projects bringing 1,673 units. Overall, launches were down 41 percent from the previous year, reads the report.

“Some developers are now back to the drawing board, reviewing repo­sitioning strategies and considering foreign capi­tal injection,” the com­pany’s Myanmar based researches said.

The total number of completed condos ex­ceeded 6,000 last year, and Colliers predicts strong supply in the com­ing year with more than 10,000 units in the pipe­line. But buyers aren’t matching supply, and a rise in defaults from cus­tomers could see projects delayed or cancelled.

Developer confidence has also taken a hit in the wake of the Yangon City Development Commit­tee’s (YCDC) controver­sial high-rise construc­tion review, which saw projects temporarily halt­ed across the city.

But that was only a con­tributing factor to the sector’s minimal growth, Colliers said. Develop­ers will now proceed with caution as they wait for a ‘solid’ regulatory frame­work from the govern­ment.

Meanwhile, buyers have shown interest in more competitively priced con­dos, with the mid-tier sector seeing a 2 percent increase in sales in the second half of the year, and a 14 percent increase year-on-year.

The introduction of more mid-level con­dos in the past year saw prices drop by 11 percent, and Yangon could see even more competitively priced condos enter the market on the back of a fall in land prices, Colliers predicts.

“Landlords are becom­ing more willing to accept more realistic valuations. This should pave the way for the entry of develop­ments offering more com­petitive prices that are geared towards genuine demand.”

 

Source: Myanmar Business Today
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