The floods of 2011 directly affected everyone in the Bangkok suburbs, and in particular the progress of the construction of the new Purple Line – a mass transit system that travels through the provinces of Bangkok and Nonthaburi. Once the water dried and construction started again, the condominium market in the area along the line became dramatically popular.
New condominium units launched along the Purple Line
The interest in the Purple Line was reflected by approximately 28,408 condominium units being launched along the line between 2012 and 2016. There was a decrease in the units launched in 2015 which was inline with the country’s economic slowdown. However, demand is expected to increase in the area once The Purple Line officially opens in August 2016.
Average take-up rate of all condominium units in the area along the Purple Line by province
|
Province |
Total units |
Units sold |
Unsold units |
% sold |
Av. price (THB psm) |
|
Bangkok |
6,454 |
4,525 |
1,929 |
70 |
67,000 |
|
Nonthaburi |
21,954 |
14,626 |
7,328 |
67 |
74,000 |
|
Total / average |
28,408 |
19,151 |
9,257 |
67 |
71,000 |
There are significantly more units being launched along the Purple Line in the province of Nonthaburi compared to the province of Bangkok. This is because land prices in Nonthaburi are still lower than in Bangkok, and suited for developments that are less than THB 2.5 million per unit. Some of these developments consist of up to 1,000 units. The average price in Bangkok is however lower than in Nonthaburi as some projects in Bangkok are selling at less than THB 40,000 per square metre, this is bringing down the overall average selling price in the areas along the Purple Line in Bangkok.
In Nonthaburi the average value is approximately THB 74,000 per square metre, and the average price of all projects in both provinces is approximately THB 71,000 per square metre. Prices along the Purple Line dramatically vary. They range from THB 37,500 to 140,000 per square metre, and the average price has been continuously increasing over the past few years, and for some projects values have increased by as much as 30 percent.
By Yaek Tiwanon Station, the average condominium values have increased from THB 57,000 per square metre, when it was launched in 2011, to THB 75,000 per square metre – a 30 percent capital appreciation. Similarly in 2011 the average price of new condominium projects around Nonthaburi Civic Centre was around THB 36,000 per square metre, but since 2013 this has increased to THB 70,000 per square metre. Nonthaburi Civic Centre was a success due to its location near government offices creating a demand for housing nearby.
The average take-up rate is also not as high as developers expected due to the volume of condominium units that were launched in the past three to four years. Most speculators and investors were therefore not interested in the area and there are only a few projects that are priced lower than THB 3 million per unit.
Additionally, a lot of housing projects have been launched with prices below THB 3 million per unit particularly in Nonthaburi. Condominium projects have been competing against these resulting in slower take-up rates than the developer expected. The few projects had high take-up rates are due to their locations close to amenities such as shopping malls.
However, once the Purple Line officially opens in August 2016, there is expected to be increased interest as many developers are waiting for the opening before spending time and money marketing their schemes.
Written by Surachet Kongcheep, associate director of research, Colliers International.
