Condo oversupply exists in some Greater Bangkok locations but will eventually decrease as developers delay new launches in those areas, say analysts and developers.
Pornarit Chounchaisit, president of the Thai Real Estate Association, said the glut is not market-wide.
"In some periods, demand in the overall condo market was higher than supply, while in others supply was higher than demand," he said. "If condo demand and supply were put on a line chart, we would see the lines criss-cross several times like the stock market. But these criss-crossing lines have been in an uptrend for many years."
Mr Pornarit said concerns about condo oversupply should subside because the market can adjust, with developers holding off on new launches in locations where unsold supply remains.
Many developers launched campaigns at mid-year to boost sales of completed, unsold condo units. Some offered a discount of up to 1 million baht or waived payments for a certain period.
"The condo market in some provinces where developers launched new supply in large amounts five years ago has improved now," Mr Pornarit said. "Condo supply in those provinces was gradually absorbed after no new supply was added. Developers adjusted."
In Greater Bangkok, developers slowed new condo launches and focused on clearing existing stock, said Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC).
"Developers are fast at adjusting strategy," he said. "They slowed down after they found a large amount of newly launched and newly registered supply."
According to a market survey by the REIC, the amount of new residential supply launched in the first half of 2018 fell by 26.7% year-on-year to 40,526 units. Value dipped 20% to 168.32 billion baht.
Both condo and low-rise supply saw a significant drop in the first half. Amount and value of condo supply fell 17% to 25,252 units and 15.5% to 100.5 billion baht, respectively.
Some developers froze new launches of projects, shifting focus to clearing existing stock. Some launched condo projects on a phase-by-phase basis to ensure absorption of supply.
Wisit Laohapoonrungsee, chief executive of SET-listed Areeya Property Plc, said the company will launch the second phase of the A Space Megabangna condo project worth 2.5 billion baht near Megabangna shopping complex in the fourth quarter.
"We will launch the second phase following first phase, which was sold out after the launch last year," he said. "We will also focus on foreign buyers, as 49% of the first phase was bought by foreigners, mainly from Hong Kong and China."
SET-listed developer AP Thailand Plc recently announced the launch of two new condo projects worth a combined 14 billion baht in the fourth quarter. They will be in locations where AP used to launch projects many years ago.
One will be in the Rama IX area, where the sales rate of existing condo supply launched during the past five years was 83%.
"Condo demand remains strong in many locations in Bangkok," said Vittakarn Chandavimol, AP's chief business officer. "Buyers are both real demand and individual investors buying for rent. Condo oversupply is not in every location."
According to property consultant Colliers International Thailand, the largest amount of condo supply remaining for sale as of August was in locations along the Light Green Line from Bearing to Samut Prakan, with 6,658 units remaining for sale out of a total of 19,173 units, or a sales rate of 65%.
The second largest was in locations along the Blue Line with 6,267 units remaining for sale from a total of 24,441 units, a sales rate of 74%.
Behind that were locations along the Orange Line, with 5,828 units remaining for sale from a total of 14,025 units, a sales rate of 58%. The Light Green Line from Mo Chit to Saphan Mai saw 3,153 units remaining with a sales rate of 74%.
In locations along the Yellow Line, there were 1,958 unsold units accounting for 15% of a total of 13,497. The Red Line had 1,016 units remaining from a total of 4,493.
"The condo market in locations along the Purple Line remains slow, as too much supply was launched earlier," said Phattarachai Taweewong, senior manager in the Colliers research department.
From 2010 to the first half of this year, a total of 32,830 condo units were newly launched. The largest amount was launched from 2012 to 2015, with 4,000-5,000 units annually.
2015 saw a significant drop.
"Though the sales rate of condo supply along the Purple Line was as high as 80%, the number of unsold units remains large," Mr Phattarachai said. "The market will continue slowing down due to no new demand."