Knight Frank Thailand Releases Market Outlook for Condominiums in the 3rd Quarter 2018

Mr. Phanom Kanjanathiemthao, Managing Director, Knight Frank Thailand Co., Ltd., said that the condominium market in Bangkok during the 3rd Quarter 2018 has returned to a lively state, in regard to the launches of new projects with a total of approximately 23,000 units, an increase of up to 156% compared to last quarter or over 14,000 units. This reflects a good level of developers’ confidence in the direction of the market. From studies conducted by the real estate research team of Knight Frank Thailand, it was found that there was a 22% increase in the supply in the CBD, compared to the previous quarter; at the same time, the supply in the areas surrounding the CBD and the suburbs increased by 15% and 7%, respectively. The areas that developers focused their attention on in this quarter included Thonglor-Ekamai, Sathorn-Rama IV, Phayathai, Ratchada-Huay Kwang, Thonburi, Chatuchak and Bangna.

On demand front, it was found that average take up rate for newly launched units in this quarter registered at around 55%, representing a decrease of 5% q-o-q due to the surge in new supply entering the market. On the whole, in this quarter, condos that sold well are located in the zone surrounding the CBD and in the suburbs, with an average take up rate of 60% in both areas. The areas that are popular among buyers included mid-Sukhumvit (sois 42-63), Rama IX-Ratchada and Thonburi. The average asking price of newly launched units in 3Q 2018 was at 150,394 baht per square metre – an increase of about 2% from the previous quarter. This was bolstered by the prices of new units in the CBD and the suburbs, which stood at 254,000 baht and 84,000 baht per square metre, or an increase of 3% and 5% over last quarter, respectively.

For the market outlook in the 4th Quarter 2018, the actions of the Bank of Thailand must be closely monitored in regards to the LTV 80% policy for second residences and every home under agreement with a value of 10 million baht and up. Should this policy come into effect, it may well affect the purchasing decisions of consumers in the market. The research team of Knight Frank Thailand expects that, in the final quarter of the year, condominium prices will continue to rise given the gradual launches of many more projects in the CBD area. There are an estimated 9,000 units of new supply in the market during the 4th Quarter 2018, which pushes up the total new units launched in 2018 to around 55,000 units.