Slower rate of rise forecast for Bangkok condo prices

Slower rate of rise forecast for Bangkok condo prices

A man looks at a brochure of a condominium project at housing fair in Bangkok in October 2015. (Bangkok Post file photo)
A man looks at a brochure of a condominium project at housing fair in Bangkok in October 2015. (Bangkok Post file photo)

Bangkok condominium prices are expected to continue rising this year but at a slower rate, according to Nexus Property Marketing Co.

The property consultant projected Bangkok condo prices to increase by 7% this year, down from 10.4% in the previous year.

Managing director Nalinrat Chareonsuphong said the average price in the low-end segment newly launched this year was expected to rise by only 5% in 2016.

She said prices that had risen over the past few years would increase at a slower pace due to the limited purchasing power of target buyers.

"Buyers in the mass-market segment are estimated to afford around 3 million baht a unit, so selling prices cannot be raised much higher than the rates they can afford," she said.

However, she said the prices of super-luxury condos were expected to continue rising, adding that the target buyers in this segment had barely been hit by the faltering economy.

The new supply in the super-luxury segment is limited, while that of the mass-market segment is abundant, Mrs Nalinrat said.

Nexus expects the number of newly launched condos in Bangkok will total 50,000 units, down from 53,500 units launched last year from 111 projects.

Around 45,000 units will be mass market, compared with 4,500 units in the high-end segment and 500 units in the super-luxury segment.

As of the end of 2015, the combined number of condos in the market rose 14% from 2014 to 447,000 units. The growth rate of the condo supply during the past five years was estimated to be 22% per year.

The top three locations which saw a significant rise in new supply in the previous year were Phra Khanong-Suan Luang, Tiwanon-Rattanathibet and Phetchakasem-Thon Buri.

All three zones are along extensions of the mass transit system.

Sales of existing condos in the market totalled 54,000 units whereas accumulative sales totalled 393,000 units, which rose to 89%.

The average sales of newly launched condos last year was 59%.

Condo prices continued rising consecutively with an increase of up to 10% from 96,000 baht per square metre to 106,000 baht per sq m in 2015, particularly for the inner-city market. This was mainly due to high land costs and premium-grade products.

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