While the new extension mass-transit lines are the main factors that are driving the condominium market in Bangkok and in the suburbs, land prices along existing mass-transit lines are extremely high and not suitable for the below mid-level market.
That’s one conclusion that was published by Colliers International (Thailand) it its Research and Forecast report for Q4 2015.
It noted how many property developers are now looking for land along the new extension lines, with some new locations gaining significant interest from developers.
Only 5,960 units were launched during Q4 of 2015, and the total of newly launched units in 2015 was approximately 34,670 units – lower than that seen during 2014 by around 30 percent. The significant decrease in the number of newly-launched units reflected the market slowdown, Colliers noted, with the real estate firm adding that most developers are still not confident of the market situation and are postponing launches of new projects.
The government announced the tax and transfer rate deduction policy during the fourth quarter, and this will expire at the end of March 2016. This policy aimed to boost the transfer rates in the condominium and housing markets during the final three months of 2015 and the first three months of this year.
The number of new condominium units launched in 2016 may be similar to that in 2015, according to the research from Colliers, but this still depends on the economic situation. The market for high-end and above projects will continue to grow during 2016, it said.
Most developers are still more focused on the sector below THB 100,000 per sqm, while approximately 50 percent of new launches in 2015 is for sale at prices between THB 50,001 per sqm and THB 100,000 per sqm.
Colliers revealed that approximately 28 percent of the total of new condominium units launched during 2015 were sold at prices lower than THB 50,000 per sqm, while the average take-up rate of all new condominium units launched during Q4 2015 was around 56 percent.
The luxury condominium market is still an interesting market for big developers. Reported the real estate firm. Many luxury condominium projects are scheduled to be launched in 2016, especially in the city area. Most luxury projects are focusing more on foreign buyers, and many developers will sell in Hong Kong, Singapore, China and Malaysia.
Many condominium projects are scheduled to be launched in the area along Sukhumvit Road (Soi 21 – 55) with starting prices higher than THB 200,000 per sqm.
Forecast
The new mass-transit lines are a positive factor for the condominium market, as many developers are looking for new locations for projects. Some projects are under construction and some new projects are expected to be open for bidding in 2016.
Many developers are still concerned on the demand and purchasing power in the condominium market, so some are focusing more on housing projects. Some developers might decrease their new condominium projects in 2016, but this still depends on the economic situation, according to Colliers.
Luxury housing projects in areas close to the sky train and subway systems will be the new competitors for luxury condominium projects in the city area. Although they are set at higher prices, the areas are more usable and those sold with land plots are highly attractive to buyers.
In conclusion, Colliers said the second-hand and ready-to-move-in sector is becoming more interesting than newly-launched units. This is due to lower prices compared with new projects.
