Condo demand up in tourist areas

The company’s associate director of research and valuation, Risinee Sarikaputra, said that after the floods hit Bangkok and its suburbs in the third and fourth quarters of last year, Bangkokians have temporarily relocated to resort cities such as Pattaya, Hua Hin and Rayong, reflecting the increase in the demand for condos in the resort cities, amid the declining demand in the capital city. 

Developers have diversified their investment plans by shifting out of Bangkok to avoid oversupply. Some developers have diversified their risk by exploring other areas of the real estate sector. That’s the reason why demand for condos in Bangkok slowed down in 2011. 

The research shows that the total take-up was 20,560 units, decreasing by 65 per cent from 2010. The slowdown was due to excess supply in the inventory, with the huge carried forward condominium supply from 2010 and the first half of 2011. 

Meanwhile, the supply of condos in Bangkok has reached a state of saturation, with cumulative supply by the end of 2011 of about 261,616 units, representing a 39-per-cent drop from 2010. New supply increased from 2,417 units in the third quarter of 2011 to 7,876 units by the last quarter of last year. 

The new supply of condos in 2011 was 42,842 units. The Knight Frank research shows that the majority of new supply in 2011 was in the Bangkok Peripheral area, representing about 65 per cent of the new supply in 2011, followed by the city fringe area and the city area, with about 19 per cent and 16 per cent, respectively.