Asking prices for property in downtown Bangkok rose by 3 percent in the final three months of 2013, however concerns have been raised about saturation levels in some parts of the Thai capital’s suburban districts.
In its Bangkok Residential Marketview Q4 2013 report, published yesterday, real estate firm CBRE Thailand reported that the majority of supply of condominiums in Bangkok is in the midtown/suburban area and it mainly consists of one-bedroom units. It noted that projects with the highest value are in the downtown area.
CBRE’s research found there will be limited new supply in the downtown area. It also expressed concerns about saturation in a number of midtown and suburban locations in Bangkok, especially with the number of completions scheduled over the next two years.
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| Source: CBRE Thailand |
Almost 13,000 new condominium units were completed in the downtown and midtown/suburban areas during Q4 2013, with less than 10 percent of those units being located in the downtown area. This brings the supply in the downtown and midtown/suburban areas to approximately 390,000 units.
The report noted there will be limited future supply of larger two- and three-bedroom units in the most prime downtown areas, which are popular location with expatriates with the highest housing rental allowances. With rising expatriate numbers, CBRE again said that expatriate rental rates may start to increase.
Much of the built but unsold inventory in the downtown area has been cleared and with limited new supply, prices of buildings in the best locations are rising.
CBRE is predicting a slower year for the midtown and suburban sectors, due to many factors such as the amount of new supply due for completion over the next two years, and concerns about how many speculators bought into these projects. This, combined with weaker end-user demand due to the on-going political crisis, increasing consumer debt and a more cautious approach to developer financing from the banks, will likely result in fewer new projects as developers focus on selling and transferring titles of their existing inventory in completed and yet-to-be-finished projects.
Read the full CBRE Bangkok Residential Marketview Q4 2013 report here.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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