The number of new condominium launches in Greater Bangkok is anticipated to be below expectations this year, mainly due to subdued demand amidst an economic downturn, as reported by Colliers Thailand.

 

Phattarachai Taweewong, Director of Research at Colliers Thailand, highlighted that the condominium market in Greater Bangkok experienced a slowdown in the second quarter of this year, driven by sluggish economic growth in Thailand and a weakening global economy.

 

“The overall condominium market in Bangkok has decelerated, with a lack of significant demand drivers,” Mr. Phattarachai explained.

 

“In the mid to lower-end market segment, buyers are grappling with high household debt, elevated interest rates, and a high rate of mortgage rejections from banks.”

 

Colliers’ market analysis revealed that in the second quarter, 5,386 new condominium units were launched across 15 projects in Greater Bangkok, with a combined value of 35.6 billion baht.

 

Of these, approximately 1,000 units from four projects were in the high-end segment, located in inner-city areas, and achieved a sales rate of 65%. The remaining units, situated outside the city center, saw a sales rate of only 30%.

 

In total, the first half of 2024 saw 8,674 new condominium units launched in Greater Bangkok, with a combined value of 49.3 billion baht. This represents nearly a 50% decline compared to the 15,413 units launched in the same period last year.

 

Despite the significant drop in the number of units, the sales value for the first half of 2024 showed a slight increase from 48.6 billion baht in the first half of 2023. This was primarily due to the fact that the majority of units launched in the first half of 2023 were in the lower-priced segment.

 

Mr. Phattarachai anticipates that new condominium launches in Greater Bangkok will not exceed 25,000 units this year, falling short of the 30,000-35,000 units projected in the first quarter.

 

“Developers observed that sales in the second quarter did not meet expectations,” he said.

 

“Even with property tax incentives in place, the transfer of residential units is expected to decline this year compared to last year due to banks’ mortgage rejections.”

 

These incentives include reducing transfer and mortgage fees to 0.01% each, down from 2% and 1% respectively, for residential units priced below 7 million baht. These measures will remain effective until the end of this year.

 

As of the end of the first half of 2024, the condominium inventory in Greater Bangkok stood at approximately 56,800 units.

 

Given the current weak demand, it is estimated that it will take 84 months to clear this inventory, compared to 60 months under more favorable economic conditions, Mr. Phattarachai noted.

 

Source: Bangkok Post

 

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The editorial team at Invest Bangkok Property