The Current and Future Prospects of Bangkok’s Condo Market
Bangkok’s condominium market is exhibiting signs of slowing down, at least on the short-term. Bangkok Post reports this as Colliers International Thailand made such note through its research department’s Senior Manager Surachet Kongcheep. The official at Colliers noted a decline in the number of condominium units launched in the most recent quarter. Mr. Surachet reported that during the second quarter, there were only 9,920 condominium units launched, which is lower by 30 percent compared to those initiated during the first quarter of this year. Despite this recent trend, there are future prospects to watch out for in the condo market. The outlook of the industry may be greatly influenced by whether the latest draft of city plan will get implemented or not. Mr. Surachet has mentioned several issues that will arise should the newest version of the plan materialize.
High Demand for Condo Units along Mass Transit Stations
Over one-fifth or 22 percent of the 9,920 units--that is, 2,200 units that were unveiled in second quarter--are located in the northern part of the city. This shows that this peripheral area still has the highest demand for such type of property. Senior Manager Surachet attributes this to the availability of land in this area especially the plots located along the minor roads that are linked to the Ratchadaphisek Road. Likewise, this area is popular and highly desirable because of its proximity to mass transit stations. The growing importance of being near these stations is attested by the location of newly-built condominium units. In fact, 70 percent of the units built in the first quarter of this year are within a kilometer radius from the mass transit lines. Both developers and buyers find these areas most interesting. Developers have embarked on a lot of condominium projects along these areas of the city during the past two years. Mr. Surachet reported that about 5 percent of the units were located within 200 meters from the BTS or MRT stations.
Condo Market and the New City Plan
The future of condominium properties may rely on the developments in the implementation of a recent draft of a new Bangkok city plan. This draft will have new height limits for buildings. It will allow structures to be taller than 23 meters and cover 10,000 square meters of area according to limitations, concerning floor to area ratio (FAR). If this happens, land prices within the 600-meter radius of the mass transit stations are expected to go up. If the Department of City Planning pushes through with implementation of the latest plan, Mr. Surachet explained, the increase in land prices will consequently cause the average selling price of condominium units in those areas to rise. Mr. Surachet further explained that these price increases in these areas near the transit stations may not be afforded by small condominium developers. It is probable that the larger big-ticket property developers would get the majority stake in building condominium units in these areas.