The residential property market witnessed a significant 29.1% drop in new sales in the first quarter of 2023, with condos being the primary factor contributing to the slowdown.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the number of newly sold residential units in Greater Bangkok in the first quarter tallied 21,291 units, with a total value of 105.7 billion baht.
This represented a decrease of 29.1% in quantity and 22% in value compared to the first quarter of 2022.
The absorption rate dropped to 3.5% per month, indicating that it would take around 26 months to sell out, as opposed to 5% and 17 months in the corresponding period of 2022.
"The residential market early this year significantly shrank compared to the same period last year, particularly with a notable decrease in the sales volume of condos," he said.
In the first quarter, the number of newly sold condo units plummeted by 48.9% year-on-year to 9,710 units worth 36.1 billion baht, marking a 45.2% decrease in value.
The absorption rate stood at 4.1% per month, indicating an estimated selling time of roughly 21 months.
"The significant year-on-year drop can be attributed to the substantial increase in new condo supply launched in the first quarter of last year, particularly in the segment of BoI low-priced condos, which experienced favourable sales rates," he said.
Mr Vichai said the number of newly launched condo units in the first quarter was close to the level recorded prior to the pandemic, although sales remained lower.
In the first quarter, the number of newly launched condos stood at 12,981 units worth 30.7 billion baht, a drop of 31.1% and 34.7%, respectively.
As a result, the number of available condo units offered for sale dropped 4.3% to 79,503 units worth 309.5 billion baht, down 9.5%.
Meanwhile, the number of newly sold low-rise houses in the first quarter of 2023 rose by 5.1% to 11,581 units worth 69.6 billion baht, down by 0.02%.
The absorption rate stood at 3.1% per month which would take around 29 months to sell out.
Semi-detached houses saw the highest growth in terms of the number of units and value as they matched demand with purchasing power amid a consecutive rise in land costs, the prices of construction materials and wages, said Mr Vichai.
The location with the largest number of low-rise houses sold was Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan with 2,674 units worth 16.5 billion baht and an absorption rate of 5% per month.
The others in the top five were Muang-Phra Pradaeng-Phra Samut Chedi in Samut Prakan, Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi in Nonthaburi, Khlong Sam Wa-Min Buri-Lat Krabang in Bangkok and Muang Samut Sakhon.
The top five locations with the largest amount of low-rise supply were Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi, Bang Phli-Bang Bo-Bang Sao Thong, Lam Luk Ka-Thanyaburi, Khlong Luang-Nong Sua in Pathum Thani and Muang-Lat Lum Kaew-Sam Kok in Pathum Thani.
The top five locations with the largest number of condos sold were Khlong Luang-Nong Sua, Phra Khanong-Bang Na-Suan Luang-Prawet, Muang Samut Prakan-Phra Pradaeng-Phra Samut Chedi, Muang Nonthaburi-Pak Kret and Huay Kwang-Chatuchak-Din Daeng.
"Developers should be more careful when launching new low-rise supply in Pathum Thani and new condo supply in Bangkok as both locations are experiencing an oversupply," Mr Vichai warned.