Bangkok, Thailand Condominium Market Update
More than 21,500 new condominium units have been launched in the Bangkok residential market the first half of 2018, similar to the same period last year.
With new skytrain lines under construction most developers are concentrating on these areas. Also being sought for development are the areas where new construction is expected to start next year for new mass transit lines. Land prices are becoming an obstacle along the existing BTS and MRT lines, however pricey areas such as Lang Suan, Thong Lor and Rathchathewi are seeing some new condo developments.
Overall there are more projects in the works by listed developers than a year ago, even though some developers have postponed their plans to launch new condominium projects. Almost all developers are putting emphasis on detached houses, as faster revenue realization is a result of shorter construction time.
The result of the condominium prices increasing due to the rising building costs is making it difficult for the developers to justify the selling price. Therefore there are many unsold condo units in the market as their demand is not as stable as single houses.
In the past three years the number of detached houses has declined, developers are still looking for desirable land plots, as the belief is the demand will remain steady. Developers are eyeing large areas along the under-construction mass-transit lines that will house 200 to 300 units, or even fewer than 200 in some instances.
The provinces around Bangkok, where land is cheaper, is also drawing some interest to developers that prefer to launch big housing projects. The price of land in Bangkok has reached the point where a minimum selling price of 5 million baht per unit is need to reach a return.
To meet yearly targets and to realize more revenue, residential property developers will need to accelerate development launches in the second half of 2018.
Areas of interest will be the Ekamai, Phaya Thai, Thong Lor and Ratchathewi areas. Also areas that should be watched is along the under-construction mass transit lines, especially the northern (Mo Chit-Ku Kot) and the Yellow Line (Lat Phrao-Samrong) and southern Green Line (Bearing-Samut Prakan).
The developers main concern will be the economic overview. Confidence of a future upswing will have a direct effect on purchase power.
More condos will be developed with selling prices between 80,000 to 120,000 baht per square metre. However, developers are expected to find buyers for units priced 200,000 bath per sqm, as well as detached houses priced above 20 million.
The Thai condominium market will continue to focus on Chinese buyers as the main foreign purchasers of property. Main locations that interest these buyers are along the existing skytrain and subway lines such as Rama IX, Sukhumvit and Ratchadaphisek. Some of the tourist destinations are seeing Chinese buyers, but the interest is lower than Bangkok property.