Bangkok Condominium Market Set For Major Recovery Into 2015
The Real Estate Information Center (REIC) is confident the rising cost of land in Bangkok and its immediate surrounding areas will lead to a strong resurgence in the condominium market in 2015.
After a slump in the first 10 months of this year saw the launch of condo units drop dramatically, there is serious reason to believe the market will rebound. The condo market hit a record high of 85,000 units in 2013, but towards the end of that year and into the early months of this year, serious political problems led to a decline in overall confidence.
The military coup of May might well have been viewed askance outside the nation, but it appears as though the resulting peace on the streets of the capital has brought with it a concomitant rise in consumer confidence.
So, while 2014 will see just 65,000 condo units released onto the market, the REIC sees plenty of room for improvement over the next 12 months or so.
The REIC feels the overall housing market will see a resurgence, but because of the increasing price of land in Greater Bangkok, they believe the majority of new owners will be looking at purchasing condos rather than single-unit or low-rise houses or townhouses.
Certainly, the majority of condo developments are centred towards the various mass transit routes and are generally more affordable than a similarly-located townhouse or single dwelling.
In the first 10 months of this year, there were 132 condo projects launched, compared to 178 in 2013.
This year the number of single house and townhouse projects has risen by eight percent and is expected to reach around 45,000 units from about 218 projects. This will be very similar to the numbers achieved in 2013.
On the larger housing front, 2013 saw 130,000 houses constructed across the Greater Bangkok region while rising land costs have seen that market contract by 15 percent to 110,000 this year.
The REIC noted that for the three years prior to 2014, the number one location for newly launched condo units had been the Nonthaburi area, with about 10,000 coming onto the market each year. This was because of the construction of the so-called Purple Line of the mass transit system.
This year, however, Thonburi has taken the number one position because construction has begun on the Blue Line. An estimated 11,700 units have been launched in Thonburi this year. The next highest location in Bangkok for condos has been Nonthaburi with 7,250 units and then the Huai Khwang-Chatuchak-Din Daeng area with 5,350 units.
The number one location for townhouses and single-storey houses for the year has been Samut Prakan with 8,500 units released. This was ahead of Bang Kruai-Bang Yai-Bang Bua Thong-Sai Noi (6,400), Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sue (5,000), Min Buri-Nong Chok-Klong Sam Wa-Lat Krabang (4,200) and Bang Khen-Sai Mai-Don Muang-Laksi (3,000).
One interesting fact revolves around the decline in the percentage share of the overall housing market from Stock Exchange of Thailand (SET)-listed developers compared to non-listed developers. The REIC say the listed companies have dropped to a 66 percent share compared to 71 percent in 2013. In the condo market this drop is down to 60 percent from 72 percent last year. Part of the reason, it is believed, is that listed companies tend to build larger condo blocks which require Environmental Impact Assessments (EIA), whereas the non-listed companies usually construct smaller projects which do not require EIA’s.