Thailand developers have been urged not to “… abandon the mid- and low-level market, which is the largest buyer group in Bangkok.”
In its new research covering Bangkok’s residential sector during Q3, real estate firm Colliers International noted that listed Thailand developers continue to be the principal players in Bangkok’s condominium market.
It reported that 73 percent of all condominium units launched during the three months ending September 2017 were developed by listed Thailand developers.
It added that roughly 50 percent of all condominium units launched were located along mass-transit lines currently under construction.
The report said that although Thailand’s overall economic situation during the first nine months of 2017 showed positive trends, demand in the condominium market hardly increased.
Unsold units exceed 30,000 and have become the chief concern of all developers.
Because all Thailand developers need to show gains every quarter, they cannot postpone project launches and have attempted to sell unsold units first, Colliers said.
All Thailand developers have sought to differentiate the project designs and project concepts of their units, with outstanding rooftops or large-scale project facilities, for example, to attract buyers.
Moreover, it said, they have tried to sell to foreign buyers and investors before selling to Thai buyers.
Many condominium projects launched in the past few months, Colliers said, have sold at above-average prices for their locations.
“Bangkok’s condominium market has continued to grow during 2017, and will continue to do so in the future given the many new mass transit lines and pipelines under construction.”
“Although Thai demand remains limited, since foreign demand seeks investment only, all developers should practise caution when selling to foreign buyers.”
The average take-up rate of condominiums in Bangkok was approximately 77 percent in Q3, with more than 36,000 units waiting to be absorbed into the market.
Roughly 55 percent of unsold units are for sale between THB 50,001 and THB 100,000 per sqm, prices that for many projects launched in the past few years and in 2017 have sold.
Although many developers have sought to increase the number of high-end and luxury projects in their portfolios, they cannot abandon the mid- and low-level market, which is the largest buyer group in Bangkok, Colliers reported.
The average take-up rate of condominium units with prices of less than THB 200,000 per sqm was approximately 76 percent, and the rate of condominiums selling for more than THB 200,000 per sqm was similar at 75 percent.
However, condominium units that sold for less than THB 200,000 per sqm remain dramatically higher in number, Colliers revealed.
It said foreign buyers have become a new target group of listed and well-known property developers in Thailand, especially for projects located in areas along Sukhumvit and Ratchadapisek Roads and in the Central Business District.
However, some developers can also sell units in projects located in areas along new mass-transit lines currently under construction to foreign buyers.
Some condominium projects from listed developers planned for launch during 4Q 2017 and in 2018 have been announced, and received good feedback or high reservation rates, if not both, prior to their official launches, Colliers concluded.