Unsold condos on the rise in Bangkok
February 20, 2018 - Bangkok
Although Thailand's overall economy last year showed positive trends, condominium demand barely increased, with the number of unsold units exceeding 45,000, a major concern for developers.
Ratchaphum Jongpakdee, general manager of property consultant Colliers International Thailand, said developers need to register gains every quarter, rendering them unable to postpone project launches to sell unsold units first.
Developers last year sought to differentiate their project designs and unit concepts, such as outstanding rooftop facilities or large-scale project facilities, in order to attract buyers, said Mr Ratchaphum.
"[Developers] also tried to sell to foreign buyers and investors before selling to Thai buyers," he said. "Many condo projects launched in the past few months sold at above-average prices for their locations."
Bangkok's condo market continued to grow in 2017 and will keep doing so in the future, given the many new mass transit lines and pipelines under construction.
Although Thai demand remains limited and foreign buyers are seeking to invest only, developers should practice caution when selling to foreign buyers, said Mr Ratchaphum.
Condo supply in 2018 is expected to increase by 55,000–60,000 units in the city and outer city areas. The amount of new supply this year is expected to be close to that in 2017, give or take 5%.
The market will depend on government policy, economic overview and land and construction costs, which are increasing every year.
In 2018, there will be more joint ventures between Thai and international developers than in 2017, he said. Major overseas partners include those from China, Japan, Hong Kong and Singapore, as the property market in Thailand is still in demand among foreign investors.
According to research by Colliers, the average take-up rate of condos in Bangkok was 75% last year, with more than 36,000 units waiting to be absorbed. Some 54% of unsold units were for sale at 50,001–100,000 baht per square metre, prices that many projects launched in the past few years.
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