A recent report by Knight Frank Thailand stated that the condominium market in Bangkok in 2018 set a record for the most number of new project launches in the past decade. For 2018, there were about 65,000 units that were released to the market. This represented an 11 per cent increase from 2017 numbers. Most of these units, about 42,000 of them, were released in the 2nd half of 2018. Let us analyse these figures and understand them a little better to make better investment decisions.
1) The bulk of these new launches, in fact about 57 per cent of the 65,000 units, were for developments in the outskirts of Bangkok. These developments are located along the extensions of the Green and Blue train lines.
Our take: We have always advocated buying in prime Bangkok. Most of the supply is happening in the outskirts of Bangkok where land is freely available. As the metro lines are expanded gradually, many developments will market themselves as being close to a train station. Buyers have to be discerning enough to know the locations with rental and resale demand.
2) The proportion of new supply in the Central Business District (CBD) of Bangkok was about 18 per cent or about 11,700 units.
Our take: Land in the CBD is scarce. Prime projects next to train stations in the CBD will sell out fast. The LINE Sathorn, next to Surasak BTS, sold out in 3 weeks. The bulk of which were local Thai buyers.
3) The proportion of new supply in the areas around the CBD was about 33 per cent or about 21,450 units.
4) The locations which developers focused on were
- From Asok to Ekkamai
- Phahon Yothin (Mo Chit to Khu Khot)
- Rama 9 to Ratchadaphisek
- Lad Prao to Rakhamhaeng
- Charan Sanitwong to Phetkasem
Our take: We still stand by our recommended areas to invest in Bangkok.
5) The take-up rate was about 55 per cent. Condominiums in the CBD had take-up rates of about 51 per cent and the surrounding areas had take-up rates of about 64 per cent.
Our take: These rates are the total rates for all developments. Those that are far away from train stations and from less reputable developers with less quality finishing tend to do poorly in terms of sales as compared to the larger developers.
6) New suburban condominiums enjoyed about 50 per cent sales rate. Popular locations are from Asok to On Nut, Udom Suk to Bearing, Rama 9 to Ratchadaphisek, Phahon Yothin and Thon Buri.
7) The average selling price for all new units in 2018 is THB150,641, down 6 per cent from the previous year. The average price in the CBD was THB250,000, down 8 per cent and the area around the CBD was down 7 per cent to 120,000 baht. The average price of newly launched suburban units increased 3 per cent from 2017 and is up 20 per cent from 2015.
Our take: As Bangkok city expands further outwards, we will see many “cheap” offerings. Many foreigners may find these developments very cheap compared to properties back home. This is especially true for buyers from cities like Hong Kong and Singapore. However, we still advocate understanding the location before making a purchase as some of these locations do not have good rental and resale markets.
The editorial team at InvestBangkokProperty.com