Bangkok’s suburban and midtown condominium market, where more than 100,000 new units are forecast to be completed within the next 18 months, will be facing what CBRE Thailand describes as a “significant stress test”.
In its Q1 Residential Market Report, released last Friday, the real estate agency expressed its concerns about the sector, noting that almost ever developer has been focusing on the same one-bedroom unit. It added the completion of a significant number of units will test the market as a time of reduced demand.
“The key will be how many of the units that have been sold will be transferred,” the report noted.
“This depends on the type of buyer. There are three main types of condominium purchasers, end-users, buy-to-rent and speculators who hope to resell before the completion of the projects.
“Our concern is that speculative purchasers who have only made a low down payment of 10 percent or less of the purchase price may default if the price does not rise or they cannot resell, and developers will be left with built but unsold inventory.”
CBRE said that historically it has been harder to sell completed condominiums rather than condominiums off-plan., and added that developers will be concentrating a more on transfers rather than new launches.
“Resale units both from speculators and any unsold developer inventory will mean there will be little chance of prices rising in projects under construction in the midtown and suburban markets with the most new supply,” CBRE reported.
Because of limited supply the dynamics in the downtown Bangkok condominium market have been very different.
“Even though the volume of resales has been low we have seen prices rising in some projects, for example the Met on Sathorn Road where prices had been flat since completion.”
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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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If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg