Work And No Play

Scant demand and oversupply continue to stymie Yangon’s condo market, but Myanmar’s potential as a hub for industry supplies a glimmer of hope for real estate

- George Styllis

Ten years ago, in Myanmar, if cash was king, condos weren’t far behind. Walk around Yangon today and the sight of half-finished real estate projects— abandoned or shrouded in green netting— tells of their devalued status.

Since the outbreak of the 2020 global pandemic, the woes of Myanmar’s flagging condominium sector have gotten worse, with sales stagnant and showing no signs of improving, analysts say.

The average selling price of residential property further declined in the first quarter from last year as competition among developers intensified, with many offering aggressive discounts.

Even when the pandemic abates, property consultancy Colliers expects the trend to continue as a large number of completed units come online. “As both buyers and developers have become more vigilant amid the volatile conditions, sales transactions in the city have remained low,” states a recent Colliers report.

The pandemic is accelerating the theme of delays, deferrals, and low sales that currently defines Myanmar’s residential market. Outstanding residential projects remain few and far between, with most developers trying to sell remaining stock rather than pushing for new launches. In the last quarter of 2019, the average take-up rate grew modestly to 61%, up by 3.6% and 5.5% on a quarterly and annual basis, respectively.

Even a long-awaited law passed mid-2019 to allow foreigners to own up to 40% of the units in a condominium project has yet to meaningfully boost demand. “Overall the situation hasn’t changed since last year, but has got worse with the pandemic,” relates Karlo Pobre, managing director of Colliers International in Myanmar.