Labour shortage forces up condo prices

Prices for Bangkok condominiums are rising as a shortage of construction workers puts a brake on development, says the property consultant Colliers International Thailand.

Associate director Surachet Kongcheep said the labour shortage is the main obstacle for condo projects in Bangkok, and many are unlikely to finish on schedule.

"Despite that, 2012 remains on track to see more condominium launches than last year," he said.

The average take-up rate in Bangkok for newly launched units in the third quarter was 64%, up from the second quarter.

Several developers are turning to smaller, low-rise condominium projects on smaller sois as land in the city becomes more expensive.

Some listed developers are expanding upcountry, especially to major cities where locals have welcomed them.

Big developers are also looking for new markets outside Thailand, especially in fellow Asean countries.

Some 8,600 units were launched in the third quarter, down by 13% quarter-on-quarter.

About 20% or 1,760 units were in and around central Bangkok including 880 along Sukhumvit Road.

Nearly 1,200 units were launched in Bangkok's northern fringe area.

As of the third quarter, Bangkok had 343,100 condo units.

More than 213,600 units or 62% of the supply are located in Greater Bangkok.

Within urban Bangkok, the northern fringe contains the most number of units due to its proximity to the central business district, mass transit connections and relatively low land prices.

The outer city areas are seeing increased activity due to the extension of the skytrain across the Chao Phraya River and further along Sukhumvit Road towards Samut Prakan province.

About 26,000 units are due for completion in urban Bangkok in the fourth quarter, with 10,100 in the northern fringe and 4,580 units in the central area.

A total of 27,900 units will have been completed in Greater Bangkok for all of this year.

The average take-up rate in the central area is 84%.

Some condominiums in the central area have quickly sold out due to their proximity to skytrain stations and high quality despite an average price of more than 110,000 baht a square metre.

Prices of newly launched units in the third quarter reached 130,000 baht per sq m at some high-end projects in the central area, followed by the eastern fringe area at 106,500 baht per sq m on Sukhumvit Road.

At 45,000 baht per sq m, greater Bangkok had the lowest prices.

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