The Thai Condominium Association (TCA) has warned condo developers to be more cautious with their launches in the second half of 2015 due to high household debt, sluggish economy and unfavorable market sentiment. Developers were also urged to carefully monitor demand and plan wisely.
Prasert Taedullayasatit, president of the TCA, noted that the recent stock market slump could impact the demand for high-priced condos as the purchasing power of most buyers is reduced by this dip. “If the SET falls to 1,400, some condo buyers may be reluctant to buy,” he said during a recent seminar on development strategy in 2015.
A downturn in the stock market might also hit condo transfers in the second half of this year. There is THB190 billion worth of condominium units waiting to be delivered to customers, a record number for Thailand, The Bangkok Post reported.
A majority of the new condominium supply launched this year in Bangkok was in the mid- to high-priced markets. Increasing land prices also triggered a rise in unit prices with some prime locations having a price tag of THB2 million per square wah.
There were 74 new condo projects comprising 31,900 units launched in greater Bangkok in the first half of 2015, up from 68 projects with 31,700 units year-on-year according to the Real Estate Information Center. The REIC also reported that 34 projects with 19,000 units were from listed developers, led by L.P.N. Development with 4,900 units, Ananda Development with 2,700 units, AP (Thailand) with 2,500 units and Supalai and Pruksa Real Estate with 1,900 units each.
Vittakarn Chandavimol, chief marketing officer of AP (Thailand), said developers should try to prevent speculation by monitoring sales and controlling condo purchases. “We limit purchases to two to four units per name at some projects to limit risk,” he noted. The right location is not enough. Vittakarn added that it was important for condo sizes and prices to match demand in light of increasing land prices in prime areas.
