Listed and non-listed property firms plan to launch new condominium projects in Bangkok and its suburbs worth more than Bt100 billion in the second half of this year after condo projects in those areas recorded total sales worth Bt101.4 billion in the first half of the year, up 72 per cent from the same period of last year.
“We have confidence that the demand to buy condominiums will see strong growth despite the slowdown in the country’s economic growth this year, thanks to the demand from the upper-income segment and foreign buyers interested in investing in Thailand’s property market,” Sansiri’s chief executive officer Apichart Chutrakul said.
Sansiri on its own plans to launch six condominium projects worth Bt12 billion in the second half of this year, while a joint venture between Sansiri Plc and BTS Group Holding plans to launch five new condominium projects worth Bt20 billion in the second half of this year.
Singha Estate’s chief residential development officer Nattavuth Mathayomchan said the company plans to launch its first condo project worth Bt4.5 billion on Asoke Road in August this year. The project will offer a price of Bt200,000 per square metre and will have 420 units.
“We decided to launch a condominium project in this location as we see strong demand in the market, especially from the upper income segment, both domestic and foreign buyers,” he said.
AP (Thailand)’s chief marketing officer Vittakarn Chadavimol said the company’s condominium projects had recorded total sales value of Bt11.3 billion in the first half of this year, up 70 per cent over the earlier estimate of Bt6.7 billion. As a result, the company has decided to launch four condo projects worth Bt11.9 billion in the second half of this year to boost condo presales to achieve Bt15 billion at the end of this year.
“Demand to buy condominiums is still growing despite the country’s economic slowdown thanks to the location close to the mass-transit system, which lures homebuyers to make the decision to buy,” Vittakarn said.
According to research by the Thai Condominium Association, new condo projects launched in Bangkok and its suburbs were worth Bt145.8 billion in the first half of this year, up 170 per cent from new condo projects worth Bt54 billion launched in the same period of last year.
The research also shows condo sales value in Bangkok and its suburbs recorded Bt101.4 billion in the first half of this year, up 71.8 per cent year on year.
In terms of condo units, 27,800 were sold in the first half of this year, up 26.9 per cent from 21,900 units in the same period of last year.
“The sales value of condominiums in Bangkok and its suburbs recorded strong growth in the first half of this year compared with the same period of last year because in the first half of 2014 the market faced political problems till the market dropped year on year. But in the first half of this year, because of the country’s political stability, it did not impact the demand for luxury condominiums, despite the country’s economic slowdown,” Thai Condominium Association president Prasert Teadullayasatit, who is also the managing director of condominium units of Pruksa Real Estate Plc, told The Nation.
He added that the main demand in the condominium market in Bangkok and its suburbs in the first half of this year came from the upper-income segment who bought condos priced at more than Bt5 million per unit.
However, the luxury condo market has seen more speculators, who buy residential units for sale later. This may impact the market if they cannot transfer the condominiums when the units are ready. Normally, a condo unit that is sold this year will be completed in 2017-18, he said.
“We are not concerned about the transfer market this year, but we’re concerned about 2017-18, if there are a great number of speculators in the market. As a result, we have to warn developers to investigate and find out if their customers are investors or speculators. This will help reduce business risk in the future,” Prasert said.
Not only has there been strong growth in the demand for luxury condos, even the demand from lower and middle-income segments has continued to grow. LPN Development Plc has continued to maintain its business plan to launch seven new condo projects worth Bt15 billion in the second half of this year.
“We have continued to maintain our new project launches in the second half of this year, as we see real demand in this market segment,” LPN Development’s managing director Opas Sripayak said.
However, the company has to research the demand at a location before deciding to launch new projects. This is the way to reduce business risk, he added.
Following the number of new condo projects launched in the second half of this year, Prasert said the association had revised up revenue from condo sales in Bangkok and its suburbs from Bt148 billion to Bt180 billion this year, up 27 per cent year on year.