Colliers: Tight lending no curb to new condo launches next year
New condominiums will continue to be launched next year with many property developers aiming to increase their sales, says property consultant Colliers International Thailand.
Surachet Kongcheep, associate director of research at Colliers, said that despite consumers' low purchasing power and difficulty in borrowing, large property developers are set to continue launching new condominium projects.
He estimated that around 5,000 new condominium units worth a combined 15 billion baht will be launched in Bangkok in the current quarter.
"The actual amount may be lower or higher than 5,000 units as many developers will wait and see the market sentiment in November," Mr Surachet said. "If sentiment is good, they may bring forward the launch dates of the projects they plan for the first quarter next year."
If this happens, it would take the total number of new condominium supply launched in Bangkok this year to 47,800 units, up from around 39,000 units in 2016.
During the first nine months this year, the number of new condominium supply launched in Bangkok totalled 42,790 units, almost double the 22,864 units launched in the same period last year.
Colliers' research also found the number of new condominium units launched in the third quarter this year totalled 18,806, the highest recorded in the past 27 quarters or since the fourth quarter of 2010.
The main reason was that most developers accelerated the launching of new projects to happen before September, as October is the month the country holds the Royal Cremation Ceremony for the late King Bhumibol Adulyadej.
The research also found 36,948 condominium units remained for sale in Bangkok as of the end of the third quarter this year, accounting for 23% of total supply.
This amount would all be taken up within a year if there is no new supply launched, it said. However, with the large amount of new units expected to be launched in 2018, the condominium market next year may see an oversupply, according to Colliers.
"It may take more than two years to absorb the existing and new supply being launched next year," Mr Surachet said.
In a related development, the House & Condo Expo reported sales of nearly 4 billion baht during the four-day event which ended last Sunday, down 12% compared with an earlier event in March this year.
The Housing Business Association, the Thai Condominium Association and the Thai Real Estate Association reported that condominiums topped with the largest number of bookings at the fair, followed by detached houses and shophouses.
According to a survey among visitors at the fair, single houses were the most wanted residential unit, accounting for 37%. It was followed by condominiums (36%), townhouses (17%), duplex houses and shophouses.
The majority of visitors, at 37%, were aged 21-30 years old, followed by 31-40 (32%) and 41-50 (15%). Some 38% had a monthly income of not more than 30,000 baht, followed by between 30,000 and 50,000 baht (26%) and higher than 50,000 baht (12%).
Most of them (58%) had a budget for a housing unit priced between 1-3 million baht. Some 19% wanted a unit priced between 3-4 million, and only 6% preferred a unit priced under 1 million.