Weekly Thailand Property News Update , EP 6 , 2023

BY Kittipong Kongthanarung

1. Newly launched “house-condo” units in Bangkok metropolitan and suburban areas, totaling 111,273 units in the year 2023, which is more than 5% higher than the number of units launched in 2022. The residential market in the area continues to grow steadily.”

Research and Valuation Information Center of Thai Real Estate Association Co., Ltd. (www.area.co.th) predicts that the number of newly launched residential units in Bangkok and its suburbs in 2023 will be approximately 111,273 units, which is a 5.3% increase from 105,648 units in 2022. The total value of all residential projects will be approximately 478.611 billion baht, which is a 6.0% increase from 451.520 billion baht launched in 2022. These figures show continuous growth in the residential market despite the COVID-19 pandemic that occurred during 2021-2022.

Mr. Sopon Pornchokchai, the president of the Research and Valuation Information Center of Thai Real Estate Association Co., Ltd. (www.area.co.th), estimates that the residential market will continue to grow in 2023 and not fall below the level of 2022. However, the market may decline in the next 2-3 years due to oversupply, which needs to be carefully monitored. The recovery will not occur due to foreign demand, but foreign demand may play a greater role in the future.

In the past, the Research and Valuation Information Center of Thai Real Estate Association Co., Ltd. has shown that the condominium market in Bangkok and its suburbs was already saturating before the COVID-19 pandemic. During 2020, the market declined significantly. In 2021, the number of new project launches increased to 118,975 units, but then decreased to 73,043 units or a 39% decrease in 2022. The decline in new launches continued in 2023, with only 60,489 units or a 17% decrease compared to the previous year.

Including, Mr. Sopon had predicted during the COVID-19 outbreak in 2021 that the real estate market would begin a new cycle of recovery in 2022, continuing for another 2-3 years until around 2024-2025, and thereafter in 2026-2027 there may be a risk of oversupply from excessive production of residential properties, leading to another downturn in the real estate market. Therefore, overproduction due to competition in the market should be a particular concern.

More Info : https://www.thansettakij.com/real-estate/562783

2.”The “Lung Suan – Chidlom” location, the hottest land in the Super Prime Area, has seen a change in ownership and an 8% annual increase in price for second-hand condos and freehold plots. Keep an eye on the transformation of the 11 large plots of land shaking up the future of the area.”

The “Chidlom-Langsuan” area, a Super Prime Area, is considered to be increasing in value every day. Owning property in this area is worth more than “gold” because there is no replacement for it.

The above statement reflects interesting information from terrabkk.com, a real estate research and consulting company, which revealed that currently the Chidlom-Langsuan area in the heart of Bangkok is still in demand in the real estate market.

Chidlom-Langsuan Super Prime Area : Currently, land prices in the areas of Pleonjit Road, Wireless Road, and Silom Road are valued at up to one million baht per square wah, according to the land appraisals by the Treasury Department for the years 2023-2026. However, these are only appraisal prices, as actual sales have exceeded one million baht per square wah for more than a decade.

Going back to the year 2006, there was a sale of a 9-rai plot of land by the British Embassy at a price of 950,000 baht per square wah. Since then, land prices in the area have continuously set new records, and the latest recorded price in 2020 was 3.9 million baht per square wah. The increasing land prices in the Chidlom-Langsuan area reflect its potential as a Super Prime Area, which is expected to continue to increase in value over time.

Identifying factors that contribute to the growth of Silom-Sathorn area It is not just being a Super Prime Area that is the sole factor that makes this location more valuable than gold. The reason is that the land in this area is almost entirely developed, leaving very little undeveloped land available. Currently, landowners in this location are waiting for the right time to sell. When a sale occurs and the value of the land increases, it will generate even more exciting new projects. At present, there are 11 plots of land in this area that are worth following, both freehold and leasehold.

More info : https://www.thansettakij.com/real-estate/563184

3.”Property D-N A” points to the direction of the condo market in 2023, which is not fully recovered. The first quarter showed a 57% decrease due to limited purchasing power. Developers are choosing to focus on developing condos in the outskirts of the city, where prices are not too high, and building shorter 8-story buildings to control land costs while prices are low, with a strong emphasis on location.

Mr. Suthech Gongchep, Managing Director of the Full-Service Real Estate Advisory Company, Property DNA Co., Ltd., revealed that the condominium market in Bangkok during the first quarter of 2023 had approximately 4,920 new units opened, which is a decrease of around 57% from the fourth quarter of 2022.

Most of the new projects are located near the existing mass transit routes. Only one project is located in the central business district, while the rest are located outside the central areas. This is because developers want to offer condominiums at affordable prices that are in line with the purchasing power of most residents of Bangkok.

The article discusses the condominium market in Thailand, specifically in Bangkok, in the first quarter of 2023. It highlights that approximately 13% of the condominiums currently for sale are located along the upcoming mass transit routes, while only around 14.4% are located outside of these areas. This is different from the situation a few years ago, where condominiums were being sold in almost all areas of Bangkok, including inner city areas.

the condominium market in 2023 may not have fully recovered compared to the previous year, as factors such as purchasing power and other negative factors continue to affect people’s decisions to buy homes. However, there is a continuous increase in confidence in the Thai residential property market, according to a survey by the Thai Chamber of Commerce.

Finally, the article highlights an interesting trend where before the year 2019, the majority of condominium projects being sold were buildings with eight floors or less, accounting for less than 50% of all condominiums for sale. However, this trend has started to change since 2019.

Newly launched condominium projects during the period of 2020-2022 were clearly aimed at selecting locations in alleys or areas with moderate potential for development, as developers wanted to create condominium projects with prices that were not too high. Therefore, selecting land in alleys or in areas with moderate potential for development would result in land prices that were not too high, which would be in line with the purchasing power and the economic situation that has not fully recovered yet.

Although condominium projects that were buildings with a height of 8 floors or less had a lower project value than high-rise building projects, due to market conditions and the low purchasing power, developers had to adapt to create projects that were in line with the changing purchasing power.

In the first quarter of 2023, condominiums that were priced at no more than 100,000 baht per square meter still had a higher proportion compared to other price levels, with approximately 77% compared to other price ranges. This resulted in the average selling price of newly launched condominiums in the first quarter of 2023 being slightly lower than the previous quarter.

More info : https://www.thansettakij.com/real-estate/563223

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