Bangkok property prices at completed new launches are set to decline as “many developers” engage in discounting to manage the current supply/demand imbalance.
In its Q2 Bangkok Condominium Market report, Colliers International predicted that this year’s demand for residential units might not dramatically increase from that seen during 2017.
This, it said, is especially true for newly launched condominium units.
Justifying the claim, the real estate firm said Bangkok property price declines are happening due to many unsold units in the market.
It added that many developers are also trying to release their available units as soon as they can.
The number of new units launched during the second quarter of 2018, according to Colliers, was 8,511 units – a drop of 40 percent compared with figures from the first three months.
Most new units were located in Bangkok’s suburban area, especially in areas along under-construction mass-transit networks.
Only two new condominium projects were launched in central Bangkok during Q2.
“All developers were focusing on areas where they are can develop projects with selling prices lower than THB 3 million per unit,” the firm reported.
Colliers revealed that the average price of new condominiums launched during Q2 was around THB 109,092 per sqm, down some 20 percent from the previous quarter due to the absence of high-end projects.
It said that the price of the best-selling new units during Q2 was between THB 100,000 per sqm and THB 150,000 per sqm, accounting for 85 percent of sold units.
Just 9.5 percent were priced higher than THB 200,000 per sqm.
The increased focus on the low-end market was because “most” buyers were unable to secure mortgages because of higher than expected debts.
One major factor affecting Bangkok property prices is the extensive supply of resale units in the market. This, Colliers said, means strong price competition between new and resale units in the same location.