New condo launches in Greater Bangkok are anticipated to fall below expectations this year, largely due to sluggish demand amidst economic challenges, according to Colliers Thailand.

 

Phattarachai Taweewong, Director of Research at Colliers Thailand, explained that the Greater Bangkok condo market experienced a slowdown in the second quarter, driven by modest domestic economic growth and global economic headwinds.

 

“The Bangkok condo market overall has slowed, primarily due to a lack of strong demand drivers,” he said. “In the mid- to lower-end segments, buyers are facing high levels of household debt, rising interest rates, and a significant rate of mortgage rejections by banks.”

 

Colliers’ market data revealed that 5,386 new condo units across 15 projects, valued at a total of 35.6 billion baht, were launched in Greater Bangkok during the second quarter. Of these, approximately 1,000 units from four projects in inner-city, high-end segments achieved a sales rate of 65%, while units outside the city center had a sales rate of just 30%.

 

In the first half of 2024, 8,674 new condo units, with a total value of 49.3 billion baht, were launched in Greater Bangkok—almost a 50% drop compared to the 15,413 units launched during the same period last year. Despite this significant decline in unit numbers, sales value for the first half of 2024 slightly increased from 48.6 billion baht in 2023, due to a higher concentration of lower-priced units in last year’s launches.

 

Mr. Phattarachai projected that new condo launches in Greater Bangkok this year will not surpass 25,000 units, falling short of the initial forecast of 30,000-35,000 units made earlier in the year.

 

“Developers have found that sales in the second quarter were weaker than expected,” he said. “Despite property tax incentives, transfers of residential units are expected to decrease this year compared to last year, mainly due to the continued challenge of mortgage rejections by banks.”

 

The government has introduced incentives, such as reducing transfer and mortgage fees to 0.01%—down from 2% and 1%, respectively—for residential units priced under 7 million baht. These incentives are set to remain in place until the end of the year.

 

By the end of the first half of 2024, the inventory of unsold condos in Greater Bangkok stood at around 56,800 units. Given the current demand, it is estimated that it would take approximately 84 months to clear this inventory, compared to 60 months under more favorable economic conditions, Mr. Phattarachai added.

 

Source: Bangkok Post

 

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The editorial team at Invest Bangkok Property