Fewer condominiums were launched in Bangkok during the third quarter
of 2013, while average prices rose marginally quarter-on-quarter and
remain more than 22 percent higher than those seen during the first
three months of this year.
In its Bangkok Condominium Market
report, Colliers International (Thailand) noted that approximately
11,240 condominium units were launched in the third quarter of 2013,
down by around 1,330 units from the previous quarter. It reported that
many more projects are planned for launch during the last quarter.
The
average price of all condominium units in Q3 2013 was similar to the
price in the previous quarter. Although most condominium projects were
launched in the Urban Bangkok Area, the average price in the City Area
was lower than in the previous quarter.
The take-up rate of newly
launched units in Q3 2013 was approximately 52 percent lower than in
Q2, with projects in the City Area, Suburban Bangkok and Northern Fringe
Area attracting the most interest.
According to statistics from
the Department of Land and reported by the agency, approximately 2,600
new condominium units were completed and registered in Q3 2013. The
total number of condominium units in Bangkok now stands at approximately
378,000 units.
A shortage of construction workers remains the
major problem for all developers, and many condominium projects have
delayed their completion dates to next year, the report said.
The
average take-up rate for new condominium projects launched in the third
quarter of 2013 was only around 52 percent, lower than in the previous
quarter. Many condominium projects were launched in September and had a
low take-up rate.
The average take-up rate in the City Area is
the highest at approximately 76 percent, although the average price of
newly launched condominiums in this location is higher than THB140,000
per sqm. However, these units are in good locations and not far from BTS
stations. The average take-up rate in the Suburban Bangkok Area came
second at approximately 68 percent.
The average price of all
condominium units launched in the third quarter was THB82,900 per sqm,
somewhat higher than in the previous quarter (THB82,010 per sqm), but
higher than the average price in the first quarter by more than 22.5
percent.
In addition, the average price in the Eastern Fringe
Area was also higher than in the City Area at nearly THB149,000 per sqm,
the highest in the past few quarters, and was due to the launch of new
projects by listed developers in the third quarter.
Colliers
noted that the average selling price of most condominium launches in the
third quarter of 2013, or approximately 60 percent, was in the range of
THB60,00 to THB80,000 per sqm sector, with most projects targeting
buyers in the middle income bracket. Many condominium projects launched
in the past few quarters focused more on mid-to-low income buyers,
especially in the Suburban Bangkok Area, but these have been affected by
the increasing household debt during past few quarters.
In
addition, all commercial banks have become stricter in approving
mortgage loans and many buyers who are considered un-creditworthy have
been unable to take possession of their residential units. This problem
has directly affected all developers because all forfeited units have to
be re-sold and this may impact developers’ cash flow. Thus, most
developers are targeting middle-income or higher earners and building
along existing mass transit lines.
The report predicted that more
than 60,000 units are scheduled to be completed in the last quarter of
2013, but the labour shortage problem has affected all property sectors
in Thailand. Most condominium projects in Bangkok have delayed their
construction progress and postponed completion to next year. In
addition, the labour problem will continue to grow and affect the
property sector.
More than 80 percent of all condominium projects
launched in the third quarter of 2013 were developed by listed
companies or their subsidiaries. During the past few years all listed
developers have launched sub-brands for the mid to low-income level in
order to cover all market segments. All new and SMEs developers were
affected by this strategy which made them study the market more
thoroughly before launching new projects, otherwise they might launch
projects in the same segment and in the same location as listed
developers. In addition, the condominium market will become a big-name
developer market in the future.
In its summary, Colliers said:
“The Bangkok condominium market still has room to growth and there is no
strong indication of an oversupply crisis, although a high number of
new condominium projects were launched during the past few quarters and
some of them still have units available.
“While many condominium
projects from well-known and reliable developers were sold out or
received a high take-up rate there were some which were unsuccessful.
“Developers
are monitoring the condominium market situation all the time, and they
are now targeting their new launches in the third quarter at
higher-income buyers, with higher prices and in the Urban Bangkok Area.
This is because household debt has affected the mid-to-low income
bracket earners, so that all developers will in the future focus more on
the middle-income group. However, for some of them it will be difficult
to leave the low-income market.
Full report: http://www.colliers.co.th/images/agency/d7Ti8WerCondominiumQ32013-en.pdf
Andrew
Batt, International Group Editor of PropertyGuru Group, wrote this
story. To contact him about this or other stories email andrew@propertyguru.com.sg
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