Bangkok has seen a massive increase in the number condominium units because other types of housing have struggled to find buyers, according to a report by the Agency for Real Estate Affairs. Condos are the one type of property where capital gains and rents are most likely to materialize.
The report noted that 74,440 new units would launch in Bangkok by the end of 2015. This would be 14 percent more than the total number of units launched in 2014. However, Dr.Sopon Pornchokchai, president of the Agency for Real Estate Affairs, pointed out there is a worry that there might be some upcoming oversupplies in certain segments of the property market.
Low priced condos, condos that cost THB1 million or less, have seen supply jump 92 percent in the past year. A majority of these are targeted to low-income buyers with a few speculators also purchasing units in this market segment. However, during times of economic problems such as the ones affecting Bangkok, it’s possible a significant number of them will not be absorbed.
The report estimates some 300,000 units of vacant low-price housing is still available on the market or in the hands of banks and other financial institutions as well as at asset management companies and the Legal Execution Department.
The luxury condo sector, those units priced at THB20 million and up, also saw a significant increase in units launched. There will be 2,318 units launched in 2015, a jump of 588 percent. The value of these units rose 792 percent year-on-year.
The number of luxury units is still relatively small and most of the developers in this sector are very experienced ones, however there have been a few projects launched by private developers who might not have intensive investment experience. The segment is expected to see some oversupply but should be more manageable than in the low-priced condo market.
