Demand for condos expected to increase 10-15% this year
Condominium demand in Bangkok will likely surge 10-15 per this year, according to Nexus Research.
“If developers do not flood the market with new projects, supply will stabilise at 50,000-60,000 units per year. The market will remain pretty healthy in the medium term (three-five years),” the research house said yesterday.
Prices will steadily increase due to the cost-push factor. Except the super luxury market, the development trend will be mainly to build smaller units due to affordability.
Last year 47,500 condos were added to the capital, representing an increase of 14 per cent from 2013 stock. That brought supply to 388,000 units. The new supply entering the market was relatively slow compared to 2011-13, when average growth was 28 per cent per year.
The highest growth last year was seen in the suburbs – Thon Buri-Phetchkasem, Ngam Wongwan-Rattanathibet and Chaeng Wattana.
In the first half of last year, the market was penetrated by political instability while the second half revealed the significant pent-up demand for condos.
Demand for Bangkok condos decreased 12 per cent to 43,300 units from the same period of the prior year, resulting in the overall sold rate of 87 per cent of total stock.
Demand in central Bangkok was relatively strong as manifested by the 73-per-cent sold rate of launches in the second half.
The other areas noticing high demand were Thon Buri, Ratchapreuk and Phetchkasem because of the mass transit network and still reasonable pricing.
The average price of condos in Bangkok rose 4.5 per cent last year due to higher land and soft costs. The average price for condos in Bangkok reached Bt95,400 per square metre at year-end.
While the average price of condos in the city area was Bt142,700 per square metre, in the super prime or central business districts of Bangkok, a price below Bt150,000 was rarely found.
It is likely that new condo prices will reach Bt300,000 per square metre for super prime products.
On the fringes, the average price increased to Bt80,500 per square metre. The suburbs witnessed the highest growth in price at about 9 per cent during the year to Bt63,000.
