Bangkok Suburban Condo Market Showed Signs of Slowing Down in Q3
According to Colliers International Thailand’s study, the Suburban Bangkok’s condominium market showed signs of slowing down last quarter in 2013.
The firm’s study of the capital’s condo market in the third quarter found that launches fell from the previous quarter by 10.5%. About 11,240 units entered the market, mostly in urban areas and focused on middle-income earners.
New units in the second quarter were also fewer than in the first quarter.
Surachet Kongcheep, associate director of research, said that this was because developers were concerned about debt among middle-to-low-income households and focused more on the higher-income market in the urban area and along the new extensions of mass-transit systems. New units were the lowest in number in the past few quarters.
About 8,950 units were located in the urban area, while only 2,290 units were in the suburban area.
The western outer part of the urban area saw the most launches, about 3,000 units, which tended to be located around Wutthakat Station on the Skytrain extension scheduled to open at year-end.
Bangkok has about 378,000 condo units, according to the Lands Department, he said.
The average price of about 60% of condo launches was Bt60,000-Bt80,000 per square metre, with most projects targeting buyers in the middle-income bracket.
Many projects introduced in the past few quarters focused more on mid-to-low-income buyers, especially in the suburbs, but these have been affected by the increase in household debt during the past few quarters.
All commercial banks have also become stricter in approving mortgages and many buyers who are considered not 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 resold and this may impact their cash flow, so most are targeting middle-income or higher earners and building along existing mass-transit lines, Surachet said.
They are also focusing more on the low-income market in neighbouring provinces, especially in Pathum Thani.
The average price of all condo units launched in the third quarter was Bt82,900 per square metre, somewhat higher than in the previous quarter’s Bt82,010, but 22.5% higher than the first quarter.
However, the take-up for new condos was only 52%, lower than in the second quarter. The take-up rate for projects |less than 200 metres from existing Skytrain and MRT stations was the highest at 63%, although the average price |was higher than for other locations.
More than 60,000 units are scheduled to be completed this quarter, but the labour shortage has hit all property sectors. Most projects have delayed construction and postponed completion to next year, Surachet said.