Central Bangkok condo launches leap in Q3
Bangkok’s central business district (CBD) condo market recorded a rise in third-quarter launches with 2,440 units, compared with 1,600 in the second quarter.
Despite warnings of rising household debt in the overall economy, developers continued to show modest confidence in homebuyer appetite by launching new projects before the year-end festivities, which take place over what is usually a quieter period for housing activity, according to property consultant DTZ.
The central zone _ Chidlom, Phloenchit, Ratchadamri, Rama I, Sam Yan and Ratchathewi _ was especially active with four project launches, accounting for 71% (1,700 units) of total launches in the third quarter.
Listed residential developers were the most active in the third quarter, in both the CBD and suburban areas.
In the wake of debt concerns and difficulty in sourcing for loans, most new launches in the third quarter were in the Grade A segment, with an average launch price of 140,000 baht per sq m.
In the previous two quarters, new projects were pricier, mostly in the luxury and super luxury segments. The average price in the second quarter was 152,000 baht per sq m.
Capital values for CBD resale condos, on the other hand, edged up in the third quarter by 0.7% quarter-on-quarter and 3% year-on-year to an average of 87,100 baht per sq m.
Condo resale prices grew at a slightly faster pace compared with launch prices during the quarter, as resale condos are viewed by investors as value-for-money properties with greater appreciation opportunities.
CBD condo projects launched in the third quarter reported an average take-up rate of 58%.
Despite a dim outlook in the overall economy, certain projects were able to close sales in a matter of days, reflecting sustained demand for reasonably priced condos and housing near mass transit.
Regardless of these movements, condo launches were strong in the fringe and suburban areas. Popular zones included Phahon Yothin, Ratchadaphisek and Thon Buri.
New mass transit lines and extensions are slowly being approved, the latest being the Orange Line running east from Central Bangkok. Once the budget is approved, development of these lines will drive the economy.
”As new launch prices continue to rise in the near to medium term, driven by rising costs, we expect domestic buyers to seek purchasing opportunities in fringe and suburban residential projects, which are more affordable compared to CBD projects,” the DTZ report said.
”We expect a similar increase in foreign buyers investing in CBD properties, particularly as more projects are taken abroad for overseas launches.”