New condo launches in Greater Bangkok for this year are anticipated to fall short of expectations, primarily due to weak demand stemming from an economic slowdown, as reported by consulting firm Colliers Thailand.
Phattarachai Taweewong, the director of the research department at Colliers Thailand, remarked that the condo market in Greater Bangkok was sluggish in the second quarter of this year, largely due to lackluster Thai economic growth and a faltering global economy.
“The overall atmosphere in the Bangkok condo market has cooled due to insufficient positive demand drivers,” he stated.
In the mid to lower-end market, buyers are facing challenges such as high household debt, elevated interest rates, and a significant mortgage rejection rate from banks.
According to Colliers’ market analysis, 5,386 new condo units from 15 projects, valued at a combined total of 35.6 billion baht, were introduced in Greater Bangkok during the second quarter. Out of this, approximately 1,000 units from four projects were situated in the upper-end segment within inner-city areas, attaining a sales rate of 65%. In contrast, the remaining units located outside the city center had a sales rate of only 30%.
In total, new condo launches in Greater Bangkok during the first half of 2024 reached 8,674 units, with a cumulative value of 49.3 billion baht, marking a nearly 50% decline compared to the 15,413 units launched in the same period last year.
Despite the significant drop in unit numbers, the sales value for the first half of 2024 saw a slight uptick from 48.6 billion baht in the first half of 2023, as most units launched in the first half of 2023 were in the lower-priced categories.
Mr. Phattarachai forecasts that new condo launches in Greater Bangkok this year will not surpass 25,000 units, which is lower than the previously projected range of 30,000-35,000 units made in the first quarter.
“Developers have observed that sales in the second quarter were not as robust as anticipated,” he noted.
“Even with property tax incentives in place, the transfer of residential units this year is expected to decline compared to last year due to the banking sector’s mortgage rejections.”
These incentives include a reduction in transfer and mortgage fees to 0.01% each, down from previous rates of 2% and 1%, respectively, for residential units priced below 7 million baht. These measures will remain effective until the end of this year.
As of the end of the first half of 2024, the inventory of condos in Greater Bangkok amounted to roughly 56,800 units. Given the current lack of demand, it is estimated that it would take about 84 months to sell through this inventory, compared to 60 months under more favorable economic conditions, Mr. Phattarachai noted.
