RESIDENTIAL MARKET

The residential market in Yangon has been grossly undersupplied in recent years. As a result, residential sales prices are incredibly high for a small and underdeveloped market like Yangon. Sales prices for major apartment developments tend to be in the region of $3,000 – $5,700 per sq m, and these vary considerably with factors such as size, location, land title and supporting facilities.

However the period of low supply and high demand will quickly be eroded by a large number of residential units flooding the market over the next 3-5 years, and we are already seeing drops in take-up rates at some projects as more and more new developments begin to flood the market. Despite this, good quality, well located and fully-financed projects such as HAGL’s Lake Suites are performing well. This is despite the fact that the HAGL project is located not on Freehold land (which remains the most secure and therefore the most popular option for investors) but on Build-Operate-Transfer land which will revert to the original Government landowner at the end of 70 years.

The recent cancellation of the Dagon City project, also located on BOT land, will do nothing to ease investors’ cautiousness where BOT products are concerned. However investor sentiment varies from project to project, and if a project is effectively priced and the developer can demonstrate that it will definitely be completed, there is no reason why a project will not be successful. This is illustrated by the good take-up rates at HAGL, with the completion of Phase 1 of the project giving investors confidence to invest in Phase 2.

With regard to properties for rent, the majority of existing serviced apartments are fully occupied, with long waiting lists, as they are the only ones with supporting facilities such as a gym, swimming pool and concierge. These prove very popular amongst the expatriate community and accordingly have very high rental rates of between $4,000 and $11,000 per month. Other non-serviced apartment buildings do have vacancies, as they are priced very highly and start to compete with the smaller villa and townhouse markets. Villa rentals can range from anywhere from $2,000 per month all the way to $25,000 per month, depending on the size of the property and the location, with Golden Valley being the most costly along with areas surrounding Inya Lake.

Looking ahead, developers and new potential developers do not appear to have been deterred by some recently-launched condominium properties experiencing falling take up rates. Yangon City Development Council saw the number of building applications from developers sharply increase last year and nearly double this year. The numbers of available units being added to the market is only increasing and this trend is set to continue for the foreseeable future.

The residential market in Yangon has been grossly undersupplied in recent years. As a result, residential sales prices are incredibly high for a small and underdeveloped market like Yangon. Sales prices for major apartment developments tend to be in the region of $3,000 – $5,700 per sq m, and these vary considerably with factors such as size, location, land title and supporting facilities.

However the period of low supply and high demand will quickly be eroded by a large number of residential units flooding the market over the next 3-5 years, and we are already seeing drops in take-up rates at some projects as more and more new developments begin to flood the market. Despite this, good quality, well located and fully-financed projects such as HAGL’s Lake Suites are performing well. This is despite the fact that the HAGL project is located not on Freehold land (which remains the most secure and therefore the most popular option for investors) but on Build-Operate-Transfer land which will revert to the original Government landowner at the end of 70 years.

The recent cancellation of the Dagon City project, also located on BOT land, will do nothing to ease investors’ cautiousness where BOT products are concerned. However investor sentiment varies from project to project, and if a project is effectively priced and the developer can demonstrate that it will definitely be completed, there is no reason why a project will not be successful. This is illustrated by the good take-up rates at HAGL, with the completion of Phase 1 of the project giving investors confidence to invest in Phase 2.

With regard to properties for rent, the majority of existing serviced apartments are fully occupied, with long waiting lists, as they are the only ones with supporting facilities such as a gym, swimming pool and concierge. These prove very popular amongst the expatriate community and accordingly have very high rental rates of between $4,000 and $11,000 per month. Other non-serviced apartment buildings do have vacancies, as they are priced very highly and start to compete with the smaller villa and townhouse markets. Villa rentals can range from anywhere from $2,000 per month all the way to $25,000 per month, depending on the size of the property and the location, with Golden Valley being the most costly along with areas surrounding Inya Lake.
Looking ahead, developers and new potential developers do not appear to have been deterred by some recently-launched condominium properties experiencing falling take up rates. Yangon City Development Council saw the number of building applications from developers sharply increase last year and nearly double this year. The numbers of available units being added to the market is only increasing and this trend is set to continue for the foreseeable future.