Thailand has a whopping $41b in unsold homes
11 January 2019
THAILAND has a total of 454,814 residential units worth US$41 billion left unsold last year, a local industry expert said.
President of the Agency for Real Estate Affairs, Sopon Pornchokchai on Thursday said unsold units in Bangkok made of for 40 percent of the total units left over from 2018 and 55 percent of the total value.
“This meant that Bankok has become the only primate city in Thailand,” he said.
He said the supplies included detached houses, semi-detached houses, townhouses, shophouses, condominiums, and residential land subdivision catered by formal private housing developers in Thailand.
Bangkok had the most unsold units totalling 91,600, while Chonburi in the east has a total supply of 34,400 units followed by Nonthaburi with 32,700 units.
According to The Nation, the total number of housing units developed in 2018 was 26,224,081.
Private developers built 454,814 units last year, or 1.73 percent of the total existing housing stock.
The report said the 454,814 units could be absorbed within two years, while the number of units sold each year could reach 227,407 units.
To compare Sopon pointed out that some 4.07 percent of the total housing stock in the United States were sold in 2018 whereas, in Thailand, it can be assumed that 2.5 percent were sold.
The average cost of a housing unit was THB2.956 million or (US$89,576) which was 33 percent of the median house price in the US at US$276,000.
Considering the average price of US$ 89,578, Thai homes were considered cheaper than those in Hanoi, Ho Chin Minh city, Kuala Lumpur and Phnom Penh which were over US$ 136,000, he said
However, this average price would still be higher than that in Jakarta and Manila which were below US$80,000.
“Actually, there is no housing shortage in Thailand. Most of the households here can afford a house in an open market.”
He said the number of existing units sold in the Thai market should be 655,602.
Sopon added eventually, it was estimated that the proportion between developers’ and home sales and existing homes sales would be at 3:1, or 655,602 : 227,407)
“In Thailand, there were 77 provinces. Apart from the Bangkok Metropolitan Region, the Eastern Seaboard and some regional cities, markets in other provinces were rather small,” he said
“There were some 47 provinces which totally had the size of the supplies of Bangkok alone. However, in smaller provinces, the rate of sale was slower than in Bangkok.”