New residential units in Greater Bangkok are expected to increase by 3-5% this year as the government revs up its budget disbursement and construction of new mass transit lines.
Samma Kitsin, director-general of the Real Estate Information Center (REIC), said residential property, especially for housing projects, is expected to fully recover by June this year, although condominiums might drop slightly.
“A key driver is mass transit projects such as the Purple Line from Bang Yai to Bang Sue, which will become operational early next year,” he said.
REIC reported yesterday new housing supply in Greater Bangkok in the first four months of 2015 totalled 27,360 units, down 9.4% from the same period last year. Low-rise units made up for 11,270 units, down 8%, while condos had 16,090 units, down 10.5% year-on-year.
Mr Samma forecast new housing units were expected to grow by 10% this year from 51,600 units last year, with new condos to drop by 5.3-6.7% from 72,900 last year to 68,000-69,000 this year because developers are focusing on the middle and high-end segments, delaying launches of projects priced below 2 million baht.
“Although the number of condo units is shrinking, the value of each project is higher,” he said. “Most developers are concerned about high household debt, which greatly affects the low-end segment.”
REIC reported unsold condominiums last year stood at 57,324 units valued at 148.4 billion baht. Of those, 53% were in the budget segments.
The combined condo supply last year was 205,998 units valued at 608.6 billion baht.
The agency reported the housing supply totalled 202,200 units last year with a value of 867.65 billion. Of those, there were 78,500 unsold units with a value at 332.9 billion baht.
Mr Samma said the overall residential supply could be managed with a slumping economy if developers slow launches in the provinces because demand there is not as high as in the capital.
Kessara Thanyalakpark, executive director of SET-listed Sena Development Plc, said it is focusing more on housing projects because they have a better outlook than condos.
“Sena still plans to launch 11 new residential projects this year, but the combined value may decline from 10 billion baht estimated earlier by shifting to focus on developing housing projects,” said Ms Kessara.
She said the company may cut its new condo projects to three from five.
In January the company announced a plan to launch 11 new residential projects worth a combined 10 billion baht because it was confident of improved market sentiment.
The 11 new projects this year include three single-house projects, three home office and townhouse projects, and five condo projects. Four worth a combined 2 billion baht (two townhouse and two condo projects) were postponements from 2014.
Sena set aggressive targets of 4.5 billion baht in presales this year and 3 billion baht in revenue, up 50% and 10% respectively from 2014.
Source: Bangkok Post NEWSPAPER SECTION: BUSINESS | WRITER: PIYACHART MAIKAEW