The Bangkok condominium market remained healthy during the second quarter of 2018 in terms of demand and prices, says Knight Frank Thailand Research.
While new supply declined by almost half from the previous quarter, this reflected the fact that most developers are planning to launch new projects during the second half of the year. A total of 8,894 new units entered the market, a decrease of 47% from the first quarter.
It is clear that industry participants are increasingly turning their attention to the development of areas around the central business district (CBD) and in the suburbs. This was reflected in the number of new units launched in these two areas, which increased by 6.5% and 2.2%, respectively, compared with the first quarter.
The most popular locations were along the electric train extension lines, especially the Light Green, Blue, and Yellow lines. New project launches took place around the same time in the Lat Phrao, Phahon Yothin, Phetkasem and Charan Sanitwong areas.
Meanwhile, the CBD in the Sukhumvit area remained the most popular location for developers during the second quarter, with two new luxury projects in Asok and Ekamai, totaling 363 units. There were no official launches of new projects in other CBD areas in the quarter.
Data compiled by Knight Frank found that the average sales rate of newly launched units was about 60%. Condos that enjoyed brisk sales were located in the CBD and the suburbs, with the take-up of 70% and 50% of total units, respectively. Areas that were popular with buyers included Sathon-Tha Phra, Rama IX-Ratchada, and Phahon Yothin-Vibhavadi.
Overall, the asking price per square meter for new units during the second quarter of 2018 was 147,800 baht, up 5% from the previous quarter. The increase was driven by new developments in the CBD where average prices were 248,000 baht per sqm, reflecting a 16% increase from the previous quarter.
Market conditions warrant close watching in the second half of the year, with many developers scheduled to launch projects. There is a high probability that the new supply in the second half will be at least 22,000 units. If that is the case, the total supply in 2018 will reach nearly 50,000 units.
Prices in the second half could break a record after six quarters, as more than 40% of the new supply will be in the CBD.