There were substantially fewer downtown condominium launches in Bangkok during the first quarter of the year, according to research from DTZ.
The extended political stalemate, which is now into its seventh month, a rising household debt burden and falling consumer sentiment were some of the reasons for the weakened activity in the residential segment, it noted in its quarterly Property Times research report.
There was only one condominium launch in the central business district (CBD) during Q1 with 139 units. The bulk of new launches during the quarter were in non-CBD fringe and suburban residential neighbourhoods such as Paholyothin, Ratchadapisek and Thonburi.
Major developers generally adopted a wait-and-see approach in Q1 to further assess the extent of the impact of the political deadlock on consumer sentiment as well as consumers’ borrowing capacity on the back of rising household debt, it said.
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A handful of listed developers were launching new projects in provincial towns instead, such as Khon Kaen, Nakorn Ratchasima, Phitsanulok and Sri Racha where demand is still relatively strong for condominium projects.
DTZ noted that despite the lacklustre demand for new launches, resale condominiums continued to be popular among buyers. Favoured locations for resale activity were Sukhumvit, Sathorn-Narathiwat and Thonburi areas.
It reported that capital values for resale CBD condominium units were flat quarter-on-quarter at
THB87,400 per sqm during Q1.
Notwithstanding the overall weaker outlook in Q1, DTZ said that demand for top quality projects with superb location and superior specifications, remained buoyant on the back of limited supply. Homebuyers tend to seek these types of properties for owner-occupation and long-term capital appreciation.
Launch prices of prime condominium projects remained unchanged from the previous quarter and stood at THB225,000 per sqm in Q1, according to the real estate firm.
In summary it said: “The overall purchase activity for condominiums is likely to remain lukewarm and very selective in Q2 on the back of a weaker economic outlook and the extended political stalemate. While several developers are likely to launch previously-postponed condominium projects in Q2, these will mainly be in non-CBD areas.
“On a positive note, the current political stalemate is not expected to cause any significant negative impact to the launch prices of prime development projects in the short-term, as there is a lack of prime sites and good quality projects in the market.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg