New record for off-plan prices

Average asking prices for off-plan condominium developments in midtown and suburban Bangkok have broken the THB 100,000 per sqm level for the first time.

This is according to real estate firm CBRE, which published its Bangkok Residential MarketView report for Q1 yesterday (Wednesday).

It noted a 5.6 percent year-on-year rise in this sector and added that the increase was driven by off-plan condo launches in the northern parts of the city.

Its research discovered that only 950 units were launched in the downtown area of Bangkok during the first three months of the year.

This compared with 4,674 units launched during Q4 2017 and represented a decrease of 66 percent year-on-year.

According to CBRE, the total number of downtown units launched during the first quarter of 2018 represented about 8 percent of the 12,544 units launched during the whole of 2017.

“We believe that developers have slowed down their launches in the downtown area this quarter following a large number of units launched in Q4 2017,” the report said.

“Although market sentiment has improved, we believe that buyers in the downtown market remained selective and cautious, resulting in a mixed sales performance.”

“Only projects that are in good, or new, locations with the right pricing that match the demand in the area will continue to outperform the market.” It added.

The research also discovered that 75 percent of future supply in downtown Bangkok has been sold, and that about 2,500 completed units remain unsold.

This, the firm said, suggests relatively healthy demand.

In line with our own view, CBRE said that its outlook is that sales will be relatively slow and stable for most projects in the downtown area, with buyers being more selective especially for projects that are asking more than THB 300,000 per sqm.

It said that property developers who are looking to achieve those high prices will have to convince buyers that their project is really worth paying those high prices.

“We do not believe that prices in the downtown area will drop, except possibly in a very limited number of completed projects with a high level of unsold inventory,” it added.