New condo supply tipped for frenzy
Colliers forecasts the time is right
The Bangkok condo market is expected to be more active from January despite the Covid-19 Omicron variant, with developers now better prepared for the virus as they plan for the future, says a property consultancy.
Phattarachai Taweewong, director of research and communication at Colliers International Thailand, said next month should see a large amount of new condo supply launched in Greater Bangkok.
"January is usually a slow month for the residential market after a high sales season in the fourth quarter," he said.
"But January 2022 will be unusual. It will see a condo market frenzy as many developers launch their projects after delaying from 2021."
Mr Phattarachai said positive signs were present in the fourth quarter of 2021 as daily new infections in Thailand eased, coupled with the country's reopening and a rising vaccination rate.
Other key drivers were a relaxation of the loan-to-value limits from Oct 20, 2021, and the extension of a cut in transfer and mortgage fees to 0.01%, from 2% and 1% respectively, for houses priced below 3 million baht until the end of 2022.
Colliers forecasts new condo supply launched in Greater Bangkok next year to grow by 28.5% to around 24,000 units, from 18,678 units in 2021.
Most locations for the new condo supply next year are in outer Bangkok areas where mass transit lines are under construction, said the consultancy.
The busy zones where a large number of new condo projects are in the pipeline include Ramkhamhaeng to Lam Salee (the Orange Line), Lat Phrao and Srinakarin (the Yellow Line), Ram Intra Road (the Pink Line) and the Bang Na area.
Mr Phattarachai said newly launched Greater Bangkok condo supply continued to drop in 2021 for the third year, after peaking in 2018 at 66,201 units.
Most developers decided to delay new condo launches in 2021, shifting the focus to low-rise houses in Greater Bangkok and major strategic provinces such as Chon Buri, Chachoengsao, Rayong, Phuket and Chiang Mai, where home purchasing power remained strong.
"The low-rise housing segment will continue to be robust in 2022 as major developers keep launching more projects," he said.
Some listed developers have continued launching new projects in locations where they are confident about demand, or where there are niche market segments.
However, most of them are cautious about setting prices as some new projects launched previously were unable to increase the sales prices, said Mr Phattarachai.
To cope with this challenge, some developers need to differentiate their properties with new selling points or added services such as pet friendliness, medical services or branded residences, he said.
In 2021 large developers shifted to lower-end condo projects, or those with units priced lower than 50,000 baht per square metre in Bangkok's outskirts.
Many projects enjoyed good sales from both real demand and investment buyers, said Mr Phattarachai.
According to Colliers, there were 47 new condo projects launched in 2021 in Greater Bangkok with a total of 18,678 units worth a combined 63.4 billion baht, down 16.1% from 21,643 units and 10.6% from 70.9 billion baht in 2020.
Of the total unit numbers, 83.2% worth 55.3 billion baht were from listed developers, while those from non-listed companies accounted for 16.8% worth 8 billion baht.