At the moment there is no serious concern about an oversupply of units in Bangkok’s housing market, but supply is expected to increase steadily in the 2nd half of this year, according to the Agency for Real Estate Affairs (AREA). The market will likely be stable in 2018 as long as supplies are controlled.
There were 198 projects launched in the 1st half of 2017 with 54,389 units worth a total value of THB184.4 billion coming onto the market, shows AREA research. The average size per project this year is 281 units, which is significantly larger than the 2016 average of 241 units.
“It is estimated that in 2017 as a whole, the total number of housing units launched will be 110,557 at a total value of THB365.2 billion. This implies that the number of units would be some 1.8% down from the number in 2016; whereas, the value would be down by 4.4% compared to that in 2016,” says Dr. Sopon Pornchokchai, AREA President.
Bangkok’s housing market
There has been some concern that the number of newly launched units would significantly be lower than last year, but the unprecedented number of projects launched in June has caused the estimates to rise close to the numbers from last year. Of the units launched in 2017, 57% were condo units, 32% were townhouses, 6% were detached houses and 4% were semi-detached houses.
One of the biggest issues this year was a low absorption rate that was significantly less than the number of new units being launched. Only 35% of newly launched homes were booked by a buyer. This figure was higher when it came to condos with 48% of these units booked. The low absorption rates have made it difficult for short-term speculation.
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