Due to higher construction costs, the "sale price" needs to be increased! Dun demand for 'second-hand electric train lines' boom. Knight Frank" stated that condo selling prices in the 2nd quarter of 2023 will move in every location by an average of 2.2% in the city center, 240,000 per square meter. Around the central business district, 120,000 per square meter, suburban area 6.8 thousand per sq m.

Nattha Khapana, Managing Director of Knight Frank Chartered Company (Thailand), said that the overall condo market in the second quarter remains "stable" with new supply being launched continuously, but if purchasing power is compared which returned gradually causing the recovery of demand to lag behind supply. This is reflected in the cumulative number of unsold units of projects at low price levels that continues to increase!

Because buyers with middle to lower incomes still have low financial liquidity, this causes project buyers to be rejected for more loans than buyers of luxury projects.

However, real estate entrepreneurs Still moving forward with opening new projects to add to the market. In addition, the confidence index increased 0.8% from the previous quarter. Including the index of sales expectations in the next 6 months, it is likely to improve.

It is hoped that the country will fully open and the tourism industry will continue to expand. It will result in a new group of buyers. and groups of foreign investors come to absorb existing supply and open new ones to compensate for weak demand or purchasing power in the country.

As for the supply of new condos for sale in the second quarter of 2023, there were 11,930 units. The number of new units for sale increased 40.1% compared to the previous quarter and also decreased 21.3% compared to the same period last year. Of the new condos for sale, 88% are in the suburbs of Bangkok. In the area around the central business district, approximately 12%.

In this quarter, there was "no" new supply in the center of Bangkok. And most of the newly opened condos for sale are still in the Grade B group with a proportion of 52%, in Grade C with a proportion of 38%, followed by Grade A with a proportion of 9% and the Super Prime level with 1%.

In the second quarter, demand for new supply that was opened for sale was somewhat "shrinking" because the group's purchasing power was insufficient to make the new market bustling. The demand for new supply opened for sale in the second quarter of 2023 is 3,324 units from a new supply of 11,930 units, representing a sales rate of 27.9%. The sales rate "decreased" from the previous quarter by 14.5% but increased by 7.7% compared to Same time last year

Meanwhile, condo offering prices in the second quarter of 2023 increased in every area. The asking price for condos in the central business district (CBD) is 248,000 baht per square meter. Increased from the previous quarter by 1.72%. The offering price of condos around the central business district (City Fringe) is 121,300 baht per square meter. Increased from the previous quarter by 1.85%.

In the second quarter, demand for new supply that was opened for sale was somewhat "shrinking" because the group's purchasing power was insufficient to make the new market bustling. The demand for new supply opened for sale in the second quarter of 2023 is 3,324 units from a new supply of 11,930 units, representing a sales rate of 27.9%. The sales rate "decreased" from the previous quarter by 14.5% but increased by 7.7% compared to Same time last year

Meanwhile, condo offering prices in the second quarter of 2023 increased in every area. The asking price for condos in the central business district (CBD) is 248,000 baht per square meter. Increased from the previous quarter by 1.72%. The offering price of condos around the central business district (City Fringe) is 121,300 baht per square meter. Increased from the previous quarter by 1.85%.

Meanwhile, the asking price of a condo in the suburbs of Bangkok is 68,000 baht per square meter. Increased 3% from the previous quarter. The average asking price for all floors increased 2.2% as a result of higher construction costs, which resulted in operators being unable to set lower selling prices. Especially in projects that are newly launched and under construction, the selling price must therefore increase.

Nattha analyzed the factors that cause the real demand group to not respond to the condo market. Because most of them are age groups that are in a state of forming themselves. which has a medium to entry level income In addition, the increase in the selling price of condos has decreased the ability of this group to purchase housing. Meanwhile, investor groups are increasingly interested in condos in the second-hand market along the electric train lines, causing second-hand market projects to become lively.

In addition, from the debt problem of buyers who are unable to continue making loan payments. This causes banks to seize assets to sell at public auction, known as bad debt (NPL). This causes more of these assets to be added to the market and may be a factor that causes the second-hand market to have a positive trend.

For the second half of the year, it is expected that the market will still have a "stable" direction because most of the foreigners who come are still focused on tourism rather than investing. The group of foreign buyers is expanding well. In some areas and looking for new locations In more residential areas, such as suburban locations along the electric train lines and in other provinces. The second-hand condo market is a market that both Thai and foreign investors are interested in. Still considering locations along the electric train line as the main focus. Meanwhile, condos that are NPL assets have received quite a bit of attention because they have attractive prices.

“Increasing household debt problems may affect demand in the middle-low-end condo market. This is because they are a group with fragile financial liquidity. This is reflected in the fact that banks are seizing more assets. As a result, banks are still cautious in granting loans to this group of buyers.”

Source:https://www.bangkokbiznews.com/property/1087532

Date 9/09/2023