Bangkok’s luxury home segment signals excess of supply
The luxury home segment has started to signal an excess of supply, while middle to upper end low-rise houses should enjoy higher demand as mass transit lines expand to outer-city areas, says a property consultancy.
Sumitra Wongpakdee, managing director of Terra Media and Consulting, said the number of low-rise houses priced at over 25 million baht launched in Greater Bangkok last year grew by 53% from 2022.
“Despite being the lowest in terms of newly launched units, the luxury segment faced limited demand,” she said. “Considering the lowest absorption rate, developers should exercise caution in launching new supply within this segment this year.”
According to the company’s market research, the number of newly launched low-rise houses in the luxury segment in Greater Bangkok tallied 2,300 units in 2023, up from 1,500 in 2022.
Of the total amount in 2023, 1,500 units were single detached houses, rising from 900 in 2022. Around 800 units were townhouses, up from 600. Both were the largest annual amount since 2015.
Compared to other price segments, the monthly average absorption rate of luxury single detached houses was the lowest with 0.7 units per project, up from 0.5 units in 2022. That of townhouses was 1.6, up from 1.0.
The highest monthly average absorption rate was for townhouses priced below 5 million baht, reaching 5.9 units per project, as the number of newly launched units dropped to 10,000 from 14,000.
However, the best-performing segment was single detached houses priced between 5 and 10 million baht as both new supply and monthly average absorption rate rose to 10,100 units in 2023 from 9,000 in 2022 and 4.5 per project from 3.7, respectively.
The other segments which saw growth of both new supply and good monthly average absorption rate were townhouses and single detached houses priced between 10 and 25 million baht. Their monthly average absorption rates were 4.2 units and 3.0 units, up from 3.0 and 2.1, respectively.
“Lat Phrao-Ramkhamhaeng-Bang Kapi was the location with the highest monthly absorption rate for both townhouse and single detached houses. The key driver was the Yellow Line which started running in July 2023,” she added.
Monthly absorption rates of townhouses and single detached houses in this location were 11.2 and 10.87 units, respectively. Their median selling prices were 9.14 million baht and 44 million baht with only 241 and 85 units remaining for sale.
“For townhouses priced below 5 million baht, top locations included Bang Phli in Samut Prakan, Pathum Thani and Vacharapol-Sai Mai, which have new mass transit lines,” she said.
Other top locations were Pathum Thani, Pin Klao-Taling Chan-Rama VII, Nonthaburi-Bang Yai-Bang Bua Thong and Samut Prakan.
Source: https://www.bangkokpost.com/property/2717083
