Developers dropping prices to shift units
New condo projects being launched in the final quarter of the year should offer prices below market value and match customer needs if they want a good sales rate, suggests a property consultant.
Phattarachai Taweewong, associate director of Colliers International Thailand's research department, said Bangkok's condo market is still slow, even though the fourth quarter is usually the sector's best season.
"If developers insist on launching new projects in the fourth quarter, they must ensure the products meet real demand," he said. "The sales price per square metre should be at least 10% lower than market value."
Price wars in Bangkok's condo market began in the middle of the year, with some developers revising project designs to downgrade to lower-end from middle-end brands, he said.
"The selling prices of condos launched last month were akin to prices five years ago as they compete with remaining units launched previously. The new supply would remain unsold otherwise."
In Bang Ao, for instance, a recently launched condo project introduced units priced 1.69 million baht or 62,000 baht per sq m, while market prices were 80,000-100,000 baht per sq m.
Near the junction of Sukhumvit and Rama IV roads, a developer launched a new condo project with unit prices starting at 2.69 million baht. Previously in the same area, another developer had offered units priced from 3.59 million baht.
"Competitive prices and product specifications that fit with demand will win customers today," he said.
"Developers are no longer setting the condo price; buyers are."
Next month Colliers plans to launch a new condo project as a sole agent -- Holme Ekkamai 22 worth 600 million baht, developed by property developer S.A. Futures Property Co.
The project will be located on 399 sq wah on Ekamai Soi 22, developed into an eight-storey tower and a total of 90 units sized from 33.75-101 sq m and priced 155,000 baht per sq m on average.
According to Colliers, condo supply on Sukhumvit Soi 63 and Soi 71, which have some interconnecting roads, totalled 5,700 units from 13 projects with a sales rate of 72% as of August.