The Market For A Condominium In Bangkok

The Bangkok condominium market showed consolidation in the first half of 2011 with healthy conditions overall, but there are warning signs of possible rising prices for construction materials, higher inflation and higher interest rates, according to Colliers International Thailand. About 11,900 units were launched in the second quarter, a 9.6% rise on the previous quarter, representing a continuation of consolidation after a dramatic number of launches in the second half of 2010.The launches were nearly evenly split between urban and suburban areas, with approximately 51% in urban Bangkok.About 2,700 new units were completed and registered in the second quarter. The total existing supply for the whole of Bangkok was nearly 304,000 units.More than 36,000 units are scheduled to be completed by the end of 2011, the highest since the economic crisis in 1997.The average selling price in the inner city was the highest at more than 130,000 baht per square meter, more than 45% higher than the average in Bangkok. The average selling prices of projects within 200 meters of the mass transit BTS or MRT stations were higher by 67-127% compared with projects farther away.The take-up rate for the second quarter was 41%, with that of projects less than 200 meters from BTS or MRT stations the highest at about 55%.One key highlight of the quarter was the opening of Noble Ploenchit with 1,442 units launched and about 700 sold on the first day.Colliers managing director Patima Jeerapaet said luxury projects offering smaller units to tap demand from lower-income buyers would be a trend as there were still many renters who were in a position to buy. Overall the market remains positive, but dangers lurk, he said. With the high number of launches comes the need for construction, and this is likely to create pricing pressures for construction materials and labor.As of the middle of 2011, 1317 housing projects were being sold in the markets of Bangkok and surrounding areas. Of these, 955 projects still have over 20 units remaining for sale, indicating that the housing market in Bangkok and its perimeter is still very large. The remaining projects with more than 20 units left for sale now total about 100 projects, indicating that the release of many projects is slowing down the sales rate.In the past 6 months, there were 233 new projects opened compared to last year’s 448 new projects. It may be inferred that in 2011 the number of projects launched will increase. However, the number of units opened is less than 108,298 units from its previous launch in 2010 with 116,791 units. This implies that in 2011 the projects became smaller.