Bangkok Condo Launches picking up
Bangkok condominium developers were busy the months of July and August. Over 11,600 new units were launched, with a total of 33,395 units for the first eight-months of 2018. The total for these two months was 37% higher than the previous second quarter of this year.
With many more developments in the works for the month of September, the industry is on track to match or exceed the 2017 total units of 56,000.
Consumer confidence and purchasing power has been steadily recovering with economic growth rates. However, economic conditions will dictate further success.
The highest interest from buyers is along the existing BTS and MRT lines with 76% of all new condos units launched along these routes in the first eight months of this year. Only 20% of the new units are along the new transit routes under construction. The lower interest in the new transit lines reflects hesitation from developers and consumers about mass transit construction, which usually runs three or more years behind the official schedules.
Listed developers are enjoying higher sales with new condo projects along the existing mass transit lines and the sales rates in these locations are averaging around 65% this year.
At some condo developments, sales to foreigners have reached the limit of 49% of available space, and in some cases units becoming fully booked within hours. Thai purchasing power has also becoming more desirable, however there are some concerns about political developments and the economy if elections take place next year.
The main players continue to be listed developers who are responsible for 58% of all new unit this year. Well-known non-listed firms have contributed another 20% with the rest of the units coming from small and new developers.
Developers believe that unit costs of 5 million baht or less is about right, therefore some 70% of new units launched this year are selling below 150,000 baht a square meter.
Townhouse developments near the under-construction transit system have showed a positive sales trend. Listed developers have seen energetic sales for their townhouse.
Also selling well are single detached housing projects with sales prices below 7 million baht, especially if they are near the pending mass transit lines.
New detached housing units that were launched in the first eight months of 2018 number around 7,000 with 70% priced at 5 million baht or less. An average take-up rate of 50% is not considered low for such housing projects and is confirmation of a positive trend.