July and August were busy months for condominium developers in Bangkok, with 11,600 new units launched, bringing the total to 33,395 for the first eight months of 2018.
The two-month total was 37% higher than for the entire second quarter of this year, and many more developments are in the pipeline for this month. Consequently, the industry is on track to match or exceed the 2017 total of 56,000 units.
Further success will depend on economic conditions, but purchasing power and consumer confidence have been recovering steadily in line with economic growth rates.
Seventy-six percent of all the new condo units launched in the first eight months of this year have been along existing BTS and MRT lines and around 20% along new routes under construction. The relatively low interest in new lines reflects scepticism among developers and consumers about mass-transit construction, which tends to run three years or more behind official schedules.
As well, new condo projects along existing mass-transit lines continue to enjoy high take-up rates among Thai as well as foreign purchasers. For listed developers, sales rates in these locations have averaged around 65% this year.
Sales to foreigners at some condo developments have reached the limit of 49% of the available space, with units fully booked within hours in some cases. Thai buyers' purchasing power has also been improving, but some buyers remain concerned about political developments and how the economy will fare under a new government if elections take place next year.
Listed developers continue to be the main players in the condo market, responsible for 58% of all new units so far this year. Another 20% have come from well-known non-listed firms, with small and new developers accounting for the rest.
Some 70% of new units launched this year are selling at below 150,000 baht a square metre, as developers believe unit costs of 5 million baht or less are about right.
The housing market is also showing a positive trend, with a pickup in new projects, especially townhouse developments near under-construction transit systems. Listed developers in particular have seen brisk sales for their townhouses.
Single detached housing projects with selling prices below 7 million baht per unit have also done well, especially if they are near future mass-transit lines.
Some 7,000 new detached housing units were launched in the first eight months of 2018, with about 70% of the total priced at 5 million baht or less. The average take-up rate of 50% is not low for housing projects and is evidence of a positive trend.
Surachet Kongcheep is a veteran local property market expert. He can be reached at surachet.jock@gmail.com.