Even as concerns about the Thai economic downturn and rising household debts continued to cause fear that these problems could possibly slowdown the property sector, Knight Frank Chartered Thailand revealed that Bangkok’s condo market actually grew in the second quarter and went as far as to dub this occurrence a phenomenon.
At the end of the second quarter this year, Bangkok condominium supply included 362,697 units, representing a 4.2 percent increase from the first quarter and a 23.9 percent increase from the same period last year. This year has seen 34,439 units from 71 condominium projects added to the supply with 20,780 units from 37 condominium projects being launched in the second quarter alone.
Supply from the Bangkok’s peripheral areas dominated the market, according to Risinee Sarikaputra, director, Head of Research and Consultancy, Knight Frank Chartered Thailand. She added that new launches in these peripheral areas made up 73 percent of the total supply since land scarcity and land cost in prime city locations continue to be major hurdles for developers.
She stated that demand from affluent buyers remained strong as high-end condominiums with average selling prices of THB150,000 per sqm. in prime locations sold out quickly if they were from reputable developers. Mid-market condominiums located further away from public transport links saw the slowest amount of growth during the second quarter. Overall, prices were once again on the rise with properties in the super-prime segment seeing the largest increases.
It was forecasted by Knight Frank that the slowdown in Bangkok condominium demand continues to be in a specific area that hasn’t spread beyond this location. There are certain markets within the city and the city fringe areas that even have potential to grow even further. The main area of concern is in peripheral Bangkok because many of the recently launched projects here are overpriced. Prices in these locations match comparable units in the fringes of Bangkok where access to transport modes and the CBD is more convenient, Risinee noted.
