The residential property market in Bangkok is expected to recover in the third quarter of the year, with confidence returning among investors and buyers after the coup on 22nd May. Bangkok’s condo market is also continued to grow, even though it was directly affected by the political turmoil in the first half of the year.
Average take-up rates of condos launched in the first quarter was around the 40 per cent mark due to the rallies and street demonstrations, which had a direct affect on the mood of many buyers. All of the developers that launched new condo projects in the first quarter restricted their marketing activities but most are now planning to lift the cut-backs and concentrate on marketing for the rest of the year. All of these developers want to attract more buyers by keeping prices to levels of the last couple of years.
It is estimated that the condominium market will recover during the second half of the year and new projects in the first half months of the year came in at just over 16,000 units, which was 21 per cent down from the same period in the previous year. New condominium launches in June have already totalled 7,000 units, with 40 per cent already sold, which reflects is renewed confidence in Bangkok’s property market.
As an indication of the renewed buoyancy of the property market, property developer Sansiri Plc is confident revenue will reach 34 billion baht this year as the country will launch thirteen new residential projects in the second half of the year based on a marked recovery of the property market. These projects are worth a total of over 23 billion baht.
The company is convinced that the market is showning signs of recovery and that it will be able to meet its target of 34 billion baht in revenue. As for retail property, developers are continuing to expand their investments, with up to 700,000 square metres of new space available for business use in the second half of the year.
Average selling prices of newly launched condos on Chaeng Watthana Road—which was for months a occupied by a large protest site of the anti-government protesters—rose from 2010-13 rose by only 3.5 per cent a year, less than the average of units in other Bangkok locations. Many condo projects that had been scheduled for launch in last year’s fourth quarter were frozen due to the political turmoil. In the first half of the year, only one project was launched there, but Supalai Plc is developing 435 units at 58,000 baht per square metre.
While large developers froze their land purchases in Bangkok’s central business district (CBD) over the past six months, individual investors kept buying plots to develop small condominium projects or resell them for attractive yields of 15-20%. The most active locations in the first half of 2014 was Sukhumvit Road, followed by Sathorn Road.