According to the Agency for Real Estate Affairs (AREA), Bangkok does not face an oversupply problem and market outlook, while sluggish, does not help from the government. The survey also noted that while the total number of units launched in the region is down, the total value of these projects actually rose in 2015.
Dr. Sopon Pornchokchai, AREA president, said the estimated number of housing launched in the Bangkok Metropolitan Region this year would be 107,821 units. This number is roughly six percent less than the number of projects launched in 2014. However, he noted that the value of these launches increased 24 percent year-on-year which resulted in a unique phenomenon that only occurred in Bangkok and Jakarta.
As of the middle of 2015, there were 178,641 units available for sale on the property market. Dr. Sopon believes this number to be large but still manageable with the market mechanisms in place. The survey revealed that with the current absorption rate in Bangkok, these units would be sold within 16 months. The total new units available for sale makes up only 3.7 percent of the total housing stock compared to 5 percent during the crisis period during 1997 to 1999, Dr. Sopon added.
High take-up for projects near mass transit lines is another reason the report doesn’t believe oversupply is a problem. AREA research found that 114,959 units have been complete near mass transportation projects with 82,356 units, or 72 percent, already being occupied. A majority of the residents in these units were owners.
The luxury housing segment where units priced over THB20 million has seen demand grow and more launches are scheduled to take place, according to Dr. Sopon. There were only 449 units with the value of THB12.54 billion launched in this segment last year but 2,166 units in the luxury segment have already been launched in 2015.
AREA research concluded that the property market is healthy relatively speaking although there are some areas of concern but oversupply isn’t one of them. Dr. Sopon said the government intervention in the property market isn’t necessary at the moment.
