Greater Bangkok condo launches decline in Q3
New condo supply launched in Greater Bangkok in the third quarter dropped consecutively from the first and second quarters as inflation and rising interest rates affected development costs.
Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the condo market recovered in the first two quarters, but significantly dropped in the third.
"Despite economic growth beating estimates, higher inflation and interest rates affected supply and demand in the housing sector," he said. "These negative factors have a strong impact on development costs and purchasing power."
The number of newly launched condos in Greater Bangkok in the first and second quarters was higher than the pandemic quarterly average of 14,000 units, tallying 18,844 and 16,312 units, respectively.
The figure shrank in the third quarter to 7,526 units, causing the total number of all residential supply launched in the period to drop 15% quarter-on-quarter.
New sales of condos took a nosedive to 8,226 units worth 29.7 billion baht from 19,055 units worth 66 billion and 13,614 units worth 51.2 billion in the first and second quarters, respectively, according to REIC.
This caused total new sales in the third quarter to drop to 20,261 units worth 113 billion baht, the lowest tally for 2022, from 30,070 units worth 136 billion baht and 23,599 units worth 116 billion in the first two quarters, respectively.
"The quarterly drop in new residential sales in the third quarter derived mainly from the great decline in new condo sales because new sales of low-rise houses in the third quarter rose by more than 20%," said Mr Vichai.
He said if the launch of new condo supply in the first and second quarters increased new sales of condos in that time frame, the unsold supply launched earlier would have slow sales because it could not meet demand from the beginning.
"Another reason is condo purchases in the first and second quarters might be Board of Investment projects that attracted investment buyers," said Mr Vichai.
"New condo development in the future should have a clear target customer segment with features that meet buyers' needs."
The monthly condo absorption rate in the third quarter consecutively decreased to 3.8 from 5.6 and 7.6 in the second and first quarters, respectively, while the rate for all residential types was 3.4, down from 3.9 in the second quarter and 5.0 in the first.
Phra Khanong-Bang Na-Suan Luang-Prawet was the zone with the highest monthly absorption rate in the third quarter at 6.8.
The top three zones with the largest number of newly launched condo supply in the third quarter were Muang Samut Prakan-Phra Pradaeng-Phra Samut Chedi (1,772 units), Sukhumvit (1,323 units) and Phra Khanong-Bang Na-Suan Luang-Prawet (1,302 units).
The top three zones where a large number of condo supply was available for sale were Huai Kwang-Chatuchak-Din Daeng with 9,921 units, Phra Khanong-Bang Na-Suan Luang-Prawet (8,285 units) and Muang Nonthaburi-Pak Kret (7,144 units).