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The demand for new condominiums was more resilient than the supply side.

The total market value of the 6,214 units sold last year was Bt43.7 billion, up 3 per cent from Bt42.5 billion in 2006.

The majority of units sold last year were located in the Sukhumvit (1,939 units) and Riverside (1,557) areas. A total of 987 units were sold in Sathorn and Silom and 732 units were sold in Central Lumpini.

The sales rate of the few projects launched was high with 63 per cent of the units launched sold by December. Several high-priced projects were sold out.  

While smaller units have been in demand since 2005, sales in the high-end market showed signs of picking up last year, researchers said.

They expect the trend to continue this year.

According to Raimon Land's research, units priced at Bt100,000 per square metre or more dominated sales. They accounted for 33 per cent or 2,050 of the 6,214 units bought last year.

Units in the Bt81,000- to Bt100,000-per-square-metre band accounted for 24 per cent, or 1,518 units, of the total units sold. Twenty-three per cent of the units sold were in the Bt61,000- to Bt80,000-per-square-metre band and 19 per cent units were sold for less than Bt60,000 per square metre.

This year, the demand for inner-city condominiums is expected to grow.

However, researchers see increased competition among market players with the entry of some majors into the real-estate business.

This is likely to push developers to offer more incentives and promotion packages to maintain or gain market share.

The potential risk for lower margins remains high, especially for new entrants with lower economies of scale.

The research predicts that given the rising cost of construction, developers will focus on areas outside the city and on smaller units to keep their margins stable

Costs of acquiring sites, construction and funding (now that escrow accounts are being launched) will shoot up. Carrying out marketing exercises such as promotions will also prove expensive. These factors will weigh on margins as developers will have little room to increase prices.  

The willingness of buyers to transfer units will be a key factor in deciding the degree of oversupply in the market over the next three years, they said.