Last year will be one developers want to forget as the Bangkok condo market grew at a slower pace than in 2015 with Thailand’s economic slowdown causing problems for the entire sector, shows new research from Knight Frank Thailand.
The supply from Bangkok’s suburban areas dominated the market in 2016 with total launches here accounting for approximately 76 per cent of the new stock. The development of the mass transit extension routes to the outskirts of Bangkok saw several developers target this area with readily available land supplies at affordable prices making these an appealing proposition. However, some companies who followed this strategy ended up having issues.
“Overall, condominium demand was weak due to the sluggish demand in condominiums in the peripheral area of Bangkok, where many buyers were unable to secure mortgages. The condominium prices in the peripheral area of Bangkok will remain stable, whereas the condominium prices in the CBD and city fringe will increase slightly due to the limited new supply,” says Frank Khan, Executive Director and Head of Residential at Knight Frank Thailand.
It was noted that new condo units in the city fringe are competing alongside older condominium units in well-maintained buildings located in Bangkok’s CBD since the price of the new units in the suburbs can be more than older ones in prime locations. The price of condominiums located in the fringe areas of Bangkok is estimated to be stable moving forward but demand won’t be helped by the competition.
“Developers have to conduct a market survey before embarking on a condominium project in some particular areas in Bangkok’s suburbs. With the sharp increase of the selling price of condominiums in the CBD and city fringe, the resales market of condominiums in the CBD will compete with the new condominium projects due to the larger gap among selling prices. For those condominiums, end-users may look to the resales units in well-maintained buildings rather than buying from the new projects due to the cheaper price tag as well as the unit size, which will be larger in the old buildings,” says Potjaman Vorakitpokathorn, Director of Project Marketing, Residential Department, Knight Frank Thailand.
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