Research &
Forecast Report
Yangon | Condominium Market
1H 2015
Sales continue to dampen; project
launches to hit new record low this
year
>> The number of condominium units launched in 1H 2015
continued to be robust despite the weakening sales
performance from both new and old projects.
>> The sales take-up rate dropped significantly by 20%
HoH, as buyers become more cautious given recent market
developments.
>>
Going forward, one and two bedrooms are seen as viable
investment options with reasonably smaller sizes translating
to a more affordable average unit price. However, the
current car parking regulation hamper the viability for
smaller size condominium units.
Accelerating success.
Forecast Direction
1H 2015 – 1H 2016
New Launches
Take-up Rate
Selling Price
Project launches to witness first
decline this year since 2012
The number of new project launches continued to surge despite
the consistent drop in demand over the past year. Some 10
projects, collectively includes additional phases and new
developments, initiated pre-sales in 1H 2015, translating to 2,686
units launched. The number is 16% higher than the same period
in 2014, and more than triple than that of 2H 2014.
New Condominium Project Launches
In the meantime, new project launches is projected to slow down
in the near future given the worsening market sales performance;
and while developers are in a holding pattern in lieu of the
upcoming elections and subsequent new administration in 2016.
Some new projects initially slated to be launched in 3Q 2015
are now being held back and deferred at least until early-2016.
Moreover, the absence of a condominium law continues to stall
potential new foreign entrants from investing in the market.
Colliers predicts that the number of unit launches in 2015 will be
below 2014 level, to register its first decline since 2012.
Source: Colliers International Myanmar
The rise in launches were mostly driven by Golden City (Phase 2)
blocks 5 to 7, together consisting 582 units. This is being followed
by the Galaxy Tower at Thanlyin Star City with close to 500 units.
A similar high-density but new development, Swe Daw City, was
also launched in the same period. To be located in Mingaladon
Township, the project is being developed by a known local retail
player Gamone Pwint.
Some other notable condominium projects launched in the first
half of the year include Pyay Residence by Noble Twin Dragon
Pte. Ltd, The IVY by Aspidin Construction & Trading Co., Ltd.
and Rose Hill Residences by Soilbuild Group Holding Ltd.
A big majority of the recently launched developments are to be
located in the Outer City Zone as large land plots remain widely
available in this vast area. To date, the zone represents 52% of
launched projects in the city. The number is expected to heighten
in the future as many developers and investors are discouraged
with the generally high land prices dictated in Downtown and
the Inner City zones.
Notable Pre-selling Condominium
Take-up Rate
The city-wide average take-up rate of pre-selling condominiums
in Yangon witnessed a new record low, which ended at a dismal
49% in 1H 2015. The rate dropped by a significant 20% from 2H
2014.
Besides the substantial rise in project launches, the sluggish sales
take-up was largely driven by the weakening market confidence.
Buyers are now beginning to become more cautious and
mindful with their purchasing process in view of recent market
developments, particularly delays in construction and project
cancellations - worsened by the lack of regulation enforced to
protect buyers and developers rights.
Notable Pre-Selling Condominium Take-up Rate
Source: Colliers International Myanmar
2
Research & Forecast Report | 1H 2015 | Yangon | Condo Market
Average Sales Price by Segment (USD/SQ M)
Reasonably sized one to two
bedrooms - key to future investments
With the increasing number of single and young couple
expatriates in Yangon, owed to the lack of facilities to support
large household expatriate requirements, well-planned
condominium developments with reasonably sized one and
two-bedrooms are expected to be in high demand in the long
term.
Yangon Condominium Stock by Configuration
Source: Colliers International Myanmar
The market similarly fails to recognize the potential demand for
the low to mid-market segments as there remains a large stock
of upper-mid to luxury projects - representing close to 80% of all
the pre-selling condominiums in Yangon.
The mid-market segment, with an average price of USD 1,637
per sq m or about USD 225,000 per unit, continued to perform
relatively better which registered a take-up rate of 57%.
Meanwhile, both the high-end and luxury segments recorded a
significant decline in take-up rates.
The high-base unit prices, driven by the large unit sizes,
have somewhat discouraged growth in real demand, being
unaffordable to the majority. This has also driven some
speculative buyers to withdraw from their investments, struggling
to fulfil their financial commitments to the developers. In fact,
default rates have been evident in some pre-selling projects
which registered 15 to 20 withdrawn purchases in the first half
of the year.
As at the end of 1H 2015, the total unsold inventory has increased
significantly to 6,654 units, double than in the whole of 2014.
Source: Colliers International Myanmar
At present, there is a disproportionate number of large units in
the city with three and four-bedroom types accounting for 85%
of the existing stock. With the increasing preference for smaller
type units, some projects have now been designed with one and
two-bedroom types, altogether representing 37% of the future
total stock. This is a significant rise from the current stock of
15%. Similarly, the unit sizes will consequently narrow from the
existing average of 112 sq m down to 73 sq m for a one-bedroom
type.
The introduction of more one and two-bed room types will
help facilitate growth in sales going forward as smaller unit
sizes translate to a relatively more affordable unit price. More
investment-led purchases are seen to occur as buyers become
guided by the rental potential on expatriate demand. However,
the current car parking regulation imposes a key challenge
among developers. The onerous car parking space requirement
of one plus 20% per unit hampers the feasibility of smaller unit
types distorting the market in favour of larger units.
3
Research & Forecast Report | 1H 2015 | Yangon | Condo Market
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Karlo Pobre
Manager
Research & Advisory
+95 (0) 931 336 099
karlo.pobre@colliers.com
The Htet Oo
Analyst
Research & Advisory
+95 (9) 976 895 535
Tony Picon
Managing Director | Myanmar
+95 (0) 942 103 4026
antony.picon@colliers.com
Copyright © 2015 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its
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Myanmar
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Yangon, Myanmar
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