Prices of unsold condo units to dip
Strong baht, new tax drag down market
Prices of unsold, ready-to-transfer condos next year are expected to continue falling as negative factors hold back investment buyers and real demand, says property consultant Nexus Property Marketing Co.
Managing director Nalinrat Chareonsuphong said negative factors in 2020 include uncertainty in the global and Thai economies, the loan-to-value (LTV) limits, a strong baht and the new land and building tax.
"The stronger baht has discouraged foreigners, while investment buyers left once the LTV took effect in April this year," she said. "The land and building tax will have a psychological effect on those who want to buy a condo for rent."
To boost the property market next year, Mrs Nalinrat suggested incentives including a cut of transfer and mortgage fees to 0.01% from 2% and 1%, respectively, covering all prices, not only for units valued at 3 million baht or less.
Nexus market research found the number of unsold condos in Bangkok tallied 62,700 units in 2019 out of a total of 654,200 units. New condo supply launched in Bangkok this year dropped by 29% from 2018 to 43,000 units.
The top three locations for new condo launches this year were all along an extension or new mass transit line, led by Thon Buri-Phetkasem with 10,100 units, accounting for 23%, followed by the north extension of the Green Line in Phra Khanong-Suan Luang with 7,800 units (18%) and the Yellow Line in Lat Phrao-Wang Thong Lang with 6,100 units (14%).
The Thon Buri-Phetkasem location also saw the highest increase in condo supply with a growth of 63% as the extension line was just completed and land prices in the locations remained low.
The average price of new Bangkok condo supply rose only 0.9% from 2018 to 141,800 baht per square metre, the lowest year-on-year increase in five years, which saw an average rise of 8%.
2019 condo supply shifted to mid-market, or units priced between 75,000-110,000 baht per sq m, from higher prices per unit of 110,000-190,000 baht. The average price in 2019 was 15% lower than in 2018.
The total value of mid-priced condo supply launched in Bangkok this year jumped to 93.4 billion baht from 50.7 billion last year. The value of high-end condo supply saw a sharp drop to 71.3 billion baht from 140 billion, she said.
Condo demand in Bangkok this year totalled 43,200 units, comprising 20,700 units newly launched in 2019 and 22,500 units launched last year or earlier.