Bangkok’s condominium market continued to grow during the first three months of the year, despite the sector being directly impacted by the ongoing political problems. Those are the findings from Colliers International Thailand in its latest Bangkok Condominium research report.
The agency found that the average take-up rate of condominiums launched in the first quarter of 2014 was only around 40 percent. This was attributed to the political situation which affected the buyers’ mood.
All developers that launched their new condominium projects in the first quarter limited marketing activities, but most developers are planning to spend more on marketing for the rest of 2014
Average prices in the first half of 2014 in some locations may be similar to past years as a lot of condominium units are still in the market. A significant number of second-hand units that are ready for move-in are also for resale with lower prices. All developers are trying to attract buyers by keeping their prices similar to past years, the agency reported.
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More worryingly, the agency noted that many condominium units in Bangkok cannot be transferred because banks have been stricter when considering mortgage loans during the past few months.
As many as 30 percent of total mortgage applications are currently being declined, and this is the main factor that will affect all developers this year because many buyers who cannot transfer condominium units will return them to developers.
In its forecast Colliers noted that property developers are still planning to launch new condominium projects in the rest of 2014. Because buyers need more encouragement, developers are likely to spend more on marketing than in 1Q 2014.
A huge number of low-end condominium units were launched in the past few years, especially in Bangkok’s suburbs and many are still available on the market. In addition, many buyers in this segment cannot transfer their units due to their financial status. Thus, the low-end condominium market in some locations is not the best choice for developers.
Some anticipated mass transit extension lines cannot be started in 2014, which directly affects property developers because they cannot launch the new projects they had expected to along these lines. This is also affecting buyers, because condominium projects in the area along under-development mass transit lines have high prices, due to the higher land prices.
Read the full Colliers International Thailand Bangkok Condominium Q1 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