Bangkok will see 14 percent fewer new housing units launched this year, however average development values will only fall 6 percent – indicating higher average prices in the Thai capital.
Dr. Sopon Pornchokchai, President of AREA, reported there were 22,294 newly launched units in the Bangkok Metropolitan Region during 2014 with a total value of THB95.019 billion. The average price of each unit was, according to AREA, extraordinarily high at THB4.26 million. This implies that buyers in higher income groups are not affected by the troublesome Thai economy, according to AREA.
Investment properties along the mass-transit system are still popular. AREA noted there are not many other choices of good locations in Bangkok.
For the whole of 2015 it is expected the number of newly-launched units will reach 98,094 units, some 14 percent below the last year’s figure. A total of 114,094 units were launched last year and this is considered a substantial shrinkage of the housing market. Real estate is a dependent variable of the economy of any country, and in Thailand exports and economic growth are all forecast to be of minimal.
However, in terms of the development the value in 2015 is predicted to be THB323.71 billion. This is only 6 percent less than in 2014.
It is expected the average offer price of the newly launched units in 2015 will be THB3.3 million – some 9.3 percent higher than last year.
Actually, according to AREA, shrinkage happened in 2014 as well. The number of newly launched units and the value of the development in 2014 were down by 13 percent and 11 percent from the figures in 2013 respectively.
AREA expects that cheaper units will not be offered in great numbers this year, possibly due to lower affordability of the middle- and lower-middle income group. The worsening economy will affect their affordability but units at higher prices will still be launched because well-to-do people, particularly those government officials and successful entrepreneurs, will not face financing difficulties, according to AREA.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
