Nov 17, 2014

Yangon High-End Residential Supply to Quadruple by 2017

More than 10,000 new high-end residential apartments in luxury condominium towers will be added to the Yangon market before the end of 2017, according to a new report.

Around 1,100 new condominium units will have been completed in the second half of 2014, and annual supply in 2015 will be limited, at roughly 1,200 units, according to Frontier Myanmar’s Q3 Yangon Real Estate Review.

However, in 2016, this number will rise sharply to more than 5,000 units, with around the same number again the following year.

“This means the overall number of higher-end apartments will have almost quadrupled between 2013 and 2017, albeit from a very low base,” said Clare Hammond, Frontier’s managing editor.

In terms of distribution, in Q3 2014, 37 percent of condominium units are downtown, with only 16 percent uptown, but this is set to shift dramatically as the supply pipeline begins to be realised.

“‘Midtown areas are set to see a major increase in high-end apartments in the coming years, with the completion of mixed-use projects like Golden City and Dagon City 1, as well as larger residential towers like Diamond Valley Condominium, Crystal Residences and Gems Garden Condominium,” said Hammond.

“We also expect more large-scale, self-contained residential projects on the outskirts of Yangon to add to supply in the coming years, particularly as the city expands outwards from its historical centre.”

Pricing to stabilise

The launch prices of off-plan condo sales have risen extremely quickly over the past five years, averaging between $250 and $300 per sq ft in Q3 2014.

“But in our view, prices at the higher-end are now likely to stabilise due to the large numbers of units being launched and heightened competition among developers,” said Hammond.

In Yangon’s office market too, prices are showing signs of levelling out since Q3 2014, but still remain disproportionately high compared to the quality of stock.

By 2017, Frontier Myanmar expects total Grade A office space in dedicated, multi-tenant buildings to reach at least 800,000 sq m, a twelvefold increase from Q3 2014 levels.

Source: Myanmar Business Today

 
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