Condo market stalls in Bangkok suburbs in Q3
Bangkok’s condominium market showed signs of slowing in the suburbs in the third quarter, according to a report by Colliers International Thailand.
The number of new launches decreased by about 10.5% from the previous quarter.
The 11,240 units launched were mostly in urban areas and focused on the middle-income market.
The number of newly launched units in suburban Bangkok in the second quarter declined from the first quarter and continued to decrease in the third.
Surachet Kongcheep, associate director of Colliers’ research department, said the decrease was because developers were concerned about household debt in the middle-to-low-income market and focused more on the higher-income urban market and along the extensions of mass transit systems.
Most new condo projects in the third quarter (8,950 units) were located in the urban area, while there were only 2,290 units in the suburban area.
The Outer City West Area saw the highest number of new launches at about 3,000 units. Most were located near the new Wutthakat skytrain station, which is due to open at the end of this year.
The average selling price of new units in the third quarter, or about 60%, was in the range of 60,000 to 80,000 baht per square metre, with most projects targeting middle-income buyers.
Many projects launched in recent quarters focused on middle-to-low-income buyers, especially in suburban Bangkok, but these have been affected by increasing household debt.
In addition, commercial banks have become stricter in approving mortgage loans and many buyers considered uncreditworthy have been unable to take possession of units.
This problem has directly affected all developers because all forfeited units have to be resold and this may impact developers’ cash flow.
As a result, most developers are targeting higher earners and building along mass transit lines. They are also focusing on the low-income market in neighbouring provinces around Bangkok, especially in Pathum Thani
The average price of all condo units launched in the third quarter was 82,900 baht per sq m, up from 82,010 baht in the previous quarter but higher than the average price in the first quarter by more than 22.5%.
The average take-up rate for new condo projects launched in the third quarter was only about 52%, lower than in the previous quarter.
The take-up rate for projects less than 200 metres from existing skytrain and subway stations was the highest at 63%.
More than 60,000 units are scheduled to be completed in the final quarter, but the labour shortage has affected all property sectors. Most condo projects in Bangkok have postponed completion to next year, said Mr Surachet.
“The Bangkok condominium market still has room to grow and there is no oversupply signal,” he said.