Car park regulations are stunting the Yangon condo market: Colliers

While the passing of the Condominium Law and its related rules is positive for the condo market in Yangon, the city’s car park regulations are the biggest barriers to growth in the market, said Mr Tony Picon, founder and director of Colliers International Myanmar, during a recent seminar on the Condominium Law and Rules hosted by the law firm Kelvin Chia Yangon.

That’s because under the current system, all condos in Yangon must be allocated with 1.2 parking spaces per unit, “a regulation which will severely stunt growth and development of smaller and more affordable units in Yangon,” Mr Picon said.

The car park regulation discourages developers from building smaller units targeting single expatriates and working couples who may not choose or be able to afford their own vehicles.

“Yet, developers in Yangon don’t have the incentive to build small units. Instead, they prefer building larger units of between 120 square meters – 150 sq m, which is around 3-4 bedrooms,” he said.

The problem is demand for units of that size is slipping, as few are able to afford them. In contrast, demand for smaller units is expected to rise on the back of a growing middle-class market. “But the parking regulations will stunt development and supply of 1-bedroom and studio units. Mr Picon said.

“Unit sizes should be getting smaller in Yangon, because it’s all about affordability. It’s not about the price per sq m but the price of the apartment. In Myanmar, most people simply cant afford a $300,000 apartment.”

Mr Picon said one of the reasons the Thai condo market is booming is developers there have the option to build small, affordable units as there are no onerous car park regulations.

In addition, they are also able to build on cheap land located away from the city as there is no existing ban on motorcycles, which allows residents to commute quickly to the nearest bus or train station connecting them to the city. “The motorbike regulations in Yangon have also hurt the condo market,” he said.

Meanwhile, demand for the existing supply of larger units built near the city is dropping. “Foreigners are now allowed to own up to 40 percent of the units in the building and banks are improving on the availability of mortgages. This is all developing and we see it coming up in the future. But without a change in the existing car park regulations, it’s game over for the condo sector,” he said.

Source: Myanmar Times

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