Demand for Bangkok condominiums is percolating while supply is simmering down, and the supply will continue to be concentrated in the outskirts where construction has commenced on mass-transit routes, such as the Purple Line from Bang Sue to Bang Yai. So prices are expected to skyrocket, according to Knight Frank Chartered (Thailand) Co.
In Bang Yai, the company has seen strong demand for land, with prices rising by more than 50%. Land prices along the Bang Sue-Bang Yai route have doubled since 2009. Land prices close to the MRT Pink Line from Khae Rai to Pak Kret to Min Buri, passing along Chaeng Wattana Road, have reached Bt100,000 per square wah (Bt25,000 per square metre) from only Bt60,000 a square wah two years ago.
Risinee Sarikputra, director of research and consultancy, said yesterday that there would be high competition among condo projects in the peripheral area. The projects on the fringes will be predominantly along Phetchaburi, Rama IX and Ratchadaphisek roads, while luxury projects from leading listed developers will pop up in the central Lumpini area and along Sathorn Road.
New launches in the outskirts reached 73% of total supply, as leading property developers rush to tap strong demand from lower-income earners. Condos are considered the best choice for this segment, which displays the highest demand, as land prices along the planned routes have soared. On the whole, the average selling price rose by 6%. This quarter has seen an increase in premium condo projects offering units priced over Bt150,000 per square metre in the city area. The average price for peripheral condo projects has also increased to average Bt60,286 this quarter from just Bt53,916 at the end of last year.
Knight Frank Thailand has tallied the figures for Bangkok condo supply from 2009 to last quarter. Supply last quarter increased by 7.5% from the final quarter of last year to 254,638 units, with 48 new projects adding 17,869 units.
The peripheral area represented 73% of all condo launches, followed by the city area at 14% and the fringe area at 13 %. The condo launch frenzy is marked by projects with many amenities and convenient access to future commuter lines. Last quarter, 13,131 units were launched in the peripheral area and only 2,422 units in the fringe area. Only 2,316 units were kicked off in the central business district (CBD) because of the scarcity of land and soaring costs.
Selective buyers are opting for secondary properties offering value for money, despite slightly inferior factors such as age and quality. The supply in the city area was dominated by the Fuse Chan-Sathorn project with 1,225 units, while the largest fringe project was Noble Revolve Ratchada with 802 units.
The establishment of the Purple Line, the future line running from Bang Sue to Rat Burana, and the ongoing Pink Line project, which incorporates the government centre on Chaeng Wattana Road and runs to Min Buri, encouraged many developers to launch their projects in this suburban area last quarter.
Demand for Bangkok condos was 9,902 units last quarter, representing a take-up rate of 55.4%. Take-up in the outskirts was significantly higher than the other areas, with 7,207 units sold last quarter. The largest customer group was middle-to-low-income earners, so developers are trying to keep unit prices below Bt3 million.
Take-up in the fringe and city areas accounted for 1,422 units and 1,273 units. The new condo projects in the fringe area were mainly confined to Ratchadaphisek Road, while the new projects in the city area were particularly luxury condominiums in the Asoke area, with a very high take-up rate.
The average price of CBD condos rose 7.1% to Bt161,314 per square metre during the first quarter, driven by the launches of premium projects in the city area around inner Sukhumvit.
From the second half of last year to last quarter, the average fringe condo price edged up only 1.3% from just Bt102,088 per square metre to Bt103,371, while peripheral condos rose by 11.8% to Bt60,286.