Bangkok condo market boosted by return of confidence among buyers
August 01, 2014 00:00 By The Nation
The condominium market in Bangkok this year will probably end up higher than early estimates made in the first quarter, as a result of buyer and developer confidence returning from June onwards, according to research by Colliers International Thailand.
The total number of condominium units launched over the full year could surpass 50,000 and the average take-up rate will be higher than in the first half of the year, depending on the market situation, said the company’s associate director of research, Surachet Kongcheep.
Colliers’ research shows that the total number of units launched in the second quarter was higher than in the same quarter of both 2011 and 2012, with many projects having been postponed from the final quarter of 2013 and the first three months of this year.
This was due to the effect that the political crisis in Thailand had on the economic situation from the last quarter of 2013 through to May this year. More positive signs were seen after the National Council for Peace and Order (NCPO) seized power on May 22.
Surachet said this was a big thumbs-up for the future prospects of the Bangkok condominium market.
“Many condominium projects, with more than 7,000 units, were launched in June, while only around 5,000 units were launched in April and May. Approximately 12,710 units were launched in the second quarter, an increase of around 26 per cent over Q1. Many developers are planning to launch new projects in the second half of 2014, so the total number of condominium units launched in the year may surpass 50,000, but that depends on the market situation,” he added.
Some 16,750 new condominium units were completed and registered at the Land Department in the first half of the year. The total existing supply for the whole of greater Bangkok is about 414,500 units.
More than 65,560 units are scheduled to be completed in the second half of the year. The number of under-construction units scheduled to be completed this year is the highest on record.
About 60 per cent, or nearly 246,360 units, are located in Suburban Bangkok, said Surachet.
The average take-up rate of all newly launched units in the second quarter was about 64 per cent, a significant increase from the previous three months.
Thai confidence was back in June after many of the policies and solutions from the NCPO began to resolve many of the problems that had affected the economic situation over the previous 10 months.
The property market is growing again after the average take-up rate in the second quarter was the highest of the past few quarters, he added.
The take-up rate in the City area is the highest, followed by the Suburban Bangkok and Outer City West areas.
Many projects in the Suburban Bangkok area are close to the future development of mass-transit lines, including under-construction as well as planned lines. Also, new condominium units launched in the second quarter have lower prices than in other locations, he said.
The average selling price of all locations in the second quarter – Bt75,000 per square metre – is roughly 18 per cent higher than in the prior quarter. The average price in the Suburban Bangkok area (Bt59,625 per square metre) increased from the first quarter by around 22 per cent.
Approximately 38 per cent of the condominium units launched last year and the first half of 2014 had selling prices in the range of Bt40,001-Bt60,000 per square metre, with most projects targeting the mid- to low-income bracket, said the associate director.
The average selling prices of newly launched projects not more than 500 metres from BTS/MRT stations are about Bt120,000 per square metre, which is about 15 per cent higher than in the previous quarter and 40-85 per cent more than in other locations.
Newly launched condo units in the second quarter less than 200 metres from BTS/MRT stations are selling at about Bt136,000 per square metre.
The average price of condominium projects more than 1,000 metres from BTS/MRT stations is over Bt64,000 per square metre, the highest in the past few quarters and an increase of 16 per cent from the previous three months.
The average selling price of newly launched units in the second quarter of 2014 increased from the first quarter by around 17 per cent, due to the many projects launched in the City area and close to BTS/MRT stations.
New condominium projects scheduled to be launched in the second half are mainly located in the areas close to BTS/MRT stations. Therefore, average prices in the latter half of the year will be higher than in the first six months, said Surachet.
In addition, the average price of new units launched in the second quarter will probably be 10 per cent higher, after developers tried to maintain or increase their prices by only a few percentage points in the first quarter.