THE NUMBER of condominiums launched in the Bangkok market dropped sharply in the second quarter with the plunge being 73.2% year-on-year and 35.6% compared to the first quarter, latest research by Knight Frank Thailand Company released today (July 21, 2020) shows.
Ms. Risinee Sarikaputra, director of research and consultancy at this real estate agency, said a total of 4,022 new condominium units were launched in the second quarter compared to 14,988 unveiled in the same quarter a year ago and 6,246 units in the first quarter.
It is noteworthy that 71% of the condos launched in the second quarter fell in the Grade C category, with selling price below 80,000 baht a square metre, followed 29% at Grade B level with prices at 80,000 to 100,000 baht per square metre. No new condos priced above 100,000 baht a square metre was introduced in this trimester.
Most of the new units were in the suburbs of Bangkok, accounting for 75%, followed by City Fringe area at 25%, and none in the Central Business District (CBD).
As expected, demand was badly affected by the coronavirus pandemic leading to a clear decrease in purchasing power. Only 581 new units were sold out of 4,022 unveiled, reflecting the lowest sales rate in 10 years.
Condo selling prices dropped in all areas of Bangkok in the second quarter compared to the same quarter a year earlier and the first quarter.
In the CBD the average selling price was 267,000 baht per square metre, representing a decrease of 0.5% compared to the first quarter, where the average price was 268,300 baht per square metre.
The average selling price in the City Fringe area was 147,356 baht per square metre, reflecting a 1.5% decrease compared to the previous quarter, which had an average price of 149,600 baht per square metre.
The average selling price of condominiums in the suburbs of Bangkok was 80,000 baht per square metre, decreasing by 1.4 per cent compared to the previous quarter, which had an average price of 81,150 baht per square metre.
The actual prices may be lower than the average asking prices by 7 to 10% or by more than half, depending on the various promotional campaigns provided by different projects.
Ms. Risinee commented that the Bangkok condominium market continues to face challenges. However, as the Covid-19 situation appears to be improving in Thailand entrepreneurs had started to resume launching new condo projects for sale over the remaining six months of this year.
Knight Frank Thailand expects there to be around 15,000 to 20,000 units launched for sale in the second half of the year, with this year’s total being 25,000 to 30,000 units.
The selling price per unit would be around 1.5 to 3 million baht, or 60,000 to 80,000 baht per square metre, which reflects a segment with the most demand. The buyers mostly demonstrate real demand, purchasing the units for their residence, but there are some investors as well.
Top: Image of downtown Bangkok taken from Cloud 47 Rooftop Bar, United Center office Tower, Silom road. Photo: Ninara (CC BY 2.0)