YANGON -- Myanmar's Serge Pun & Associates is entering the middle-class housing market here, moving away from the sluggish luxury segment to tap an area expected to enjoy broader demand.
Yoma Strategic Holdings, an arm of the conglomerate, plans to construct an 11-building condominium complex at StarCity, an urban development project about a half-hour drive southeast of downtown Yangon. Prices will range from 42 million kyat ($27,500) for a studio apartment to 160 million kyat for a three-bedroom residence. This compares with nearly 100 million kyat for even the cheapest units at StarCity now, a local real estate company says.
The conglomerate intends to start delivering units to buyers in 2020. It also will begin offering mortgages with terms of up to 25 years through SPA group member Yoma Bank.
The shift in segment comes amid a broader pivot by developers in Myanmar away from high-end housing in favor of midrange properties.
The country has a glut of luxury units, which typically have made up about 85% of the market, while the market for middle-class housing remains relatively firm, according to real estate services company Colliers International. Slow progress on economic reform and a weakening currency have dampened demand for real estate investment by the wealthy.
The growing availability of housing loans from banks also plays a role in the shift. Around last year, banks began offering more mortgages with terms of 15 to 25 years, departing from the usual model of demanding full repayment in a much shorter time, often less than 10 years. Yoma Bank is following this trend with its new 25-year mortgages.
Myanmar's government aims to have another 1 million residences built by 2030 via the public and private sectors to accommodate a growing urban population.