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MONDAY, December 04, 2023

Knight Frank warns investors on Bangkok condo market

Knight Frank warns investors on Bangkok condo market
FRIDAY, January 06, 2017

INVESTORS must watch the residential-condominium market in Bangkok cautiously amid expectations that the country’s gross domestic product will grow by 3.4 per cent this year, according to Knight Frank Thailand.

Purchasing power remains subdued, and the income levels of those in new segments of demand are not high enough. Household debt continues to be high, and banks remain stringent on releasing credit, with a high volume of loan rejections, especially when it concerns budget condos outside Bangkok. 
The budget-condo market in the outskirts of Bangkok still has a high level of risk due to weakening market conditions. There is also a high supply remaining in the market, especially along the suburban train lines. 
Moreover, new projects are still being planned to boost development, given that there is still an ample supply of land available. 
The fringe area of Bangkok is likely to offer good development opportunities. There is still demand while supply of available land for development is limited. Projects launched in such areas have a good chance of achieving high sales. Prices may rise.

Areas of risk
The area around Rattanathibet and Tiwanon roads has a lot of remaining supply, high market competition, and a low absorption rate. Purchase power is also weak and there may be price reductions in the area.

Areas worth watching
The areas around the new train lines, such as the Orange Line, Light Green Line, Mo Chit-Khu Khot Line, Yellow Line, and Pink Line, still have low supply. Purchasing power is likely to remain strong. However, caution is warranted, as the supply of land available for development is high. 
For the general outlook of super-luxury condominiums in central Bangkok under its current economic-growth forecast, the overall market outlook is good with consistently strong purchasing power, but there are also continual launches of new developments. 
Price levels remain high and may rise because of the steady price increases for available (and increasingly scarce) land suitable for development. Market speculation may be quite high, especially in projects with small units.