Thursday, August 17, 2017

Yangon market losing its steam

Transactions in Yangon’s property market have slowed perceptively in 2014, with buyers unwilling to pay the high prices on offer, real estate agents say.

Prices have so far not shown the massive increases of the last two years, and appear to be levelling off, said U Khin Maung Aye, senior agent at Shwe Kan Myae.

“Yangon’s real estate market is facing slowing transactions,” he said. “Numbers are quite down compared with 2012 and 2013 because of high property prices.” He estimated that transactions are occurring about 50 percent less as they did 12 months ago.

Current prices in Yangon’s core townships sit around K100,000 to K300,000 for a square foot, said Mya Pan Than Khin real estate agent Ko Min Min Soe.

In downtown Yangon, street-level apartments begin selling at about K150 million, with the upper floors starting at K40 million and reaching as high as K500 million depending on quality and location.

Properties in Yangon’s outskirts vary significantly, with land starting at K50 million for 2400 square feet in back corners of New North Dagon, according to brokers, while commanding up to K500 million for 2400 square feet on main roads in South Okkalapa township.

Prices vary based particularly on street access, but are little changed on 2013, said Ko Min Min Soe.

Soaring land costs priced many would-be buyers out of the market, and led to a pause for many speculators. Government officials have also made moves to cool the market in recent months, such as attempting to enforce a tax on property transactions.

“People were asking for very high prices, but it means it’s getting difficult to find buyers. There are worries now that it is not easy to sell,” said Phoenix real estate agent Ko Htun Htun.

High prices in the downtown core pushed many buyers to seek land in Yangon’s outskirts, with North and South Dagon and some streets in South Okkalapa seeing increased attention.

“Some owners are asking too much for land not near main roads or central regions, and nobody is interested in buying it. Prices in the outskirts are cheaper and so more investors are interested in it,” he said.

One bright spot in the market is land suitable for high-rise construction and big projects, which are still being snapped up, said Ko Htun Htun.

When land prices are too high, builders cannot buy land, so often they agree to pay land-owners with in-kind apartments once construction on a project is complete, he said.

Overall, real estate agents said Yangon’s property market will continue pushing into the outskirts due to unattainably high prices at present for downtown properties. Still, most said that growing prices are set to decelerate in the coming months.