Newly launched condo supply in the second quarter continued to rise in Bangkok, with most launches in June after the political situation became clearer, says property consultant Colliers International Thailand. Despite many negative factors, developers still launched new condo supply in Bangkok in the second quarter, said Phattarachai Taweewong, Colliers' associate director.
"Developers need to keep launching new condo projects," he said. "If they waited to launch a large number of projects in the second half, the situation might be not as good as they expected." He said negative factors included loan-to-value (LTV) curbs, the land and buildings tax, rising land prices, the gloomy economy and people's lack of confidence in the political situation under the new government. According to Colliers' market research, there were 26 condo projects launched in Bangkok in the second quarter with a total of 9,632 units worth a combined 74.87 billion baht.
The unit amount rose by 14.1% from the first quarter this year and 13.2% from the second quarter last year. "In April and May, fewer new condos were launched," Mr Phattarachai said. "The largest amount was in June, showing that developers waited for the election to be settled." In June alone, the amount of new condo supply launched was 5,100 units, accounting for 53% of the total in the quarter. However, the total amount of new condo supply launched in Bangkok in the first half fell by 20% to 18,075 units worth 120.3 billion baht as developers focused on selling completed, unsold condo units in the first quarter. "They needed to boost sales of ready-to-transfer units to avoid the new LTV limits, which would have an impact on some buyers," Mr Phattarachai said. "Some offered a discount of up to 30% of unit price in an attempt to clear their inventory."
The majority of new condo supply in the second quarter was in the inner city, with 6,911 units representing 71.8%. Average selling price was 148,365 baht per square metre, up 45% from the first quarter this year and 10% from the second quarter last year, as most of the new supply was in the inner city, where land prices are higher than in the outer city. Outer Bangkok remained the hottest location for new condo supply launched during the past seven years, with a total of 199,440 units accounting for 54.1% of total supply in the city (368,347 units).
Northern Bangkok (Ratchadaphisek, Phahon Yothin) was next with 50,513 units (13.7%), followed by the inner city (Sathon, Silom, Sukhumvit) with 44,543 units (12.1%). In the past five years, condos priced at 50,000-100,000 baht per sq m were the largest price bracket for new supply launched, with a total of 267,029 units, followed by 100,000-150,000 baht (64,530 units) and under 50,000 baht (25,579 units). The highest growth was for condos priced at 100,000-150,000 baht per sq m, due to rises in land prices in Bangkok over the past five years.