Bangkok condo market sees rush in project launches following May coup

BANGKOK: The Bangkok condominium market has seen a rush in new condo projects launch, especially in the midtown and suburban market since the third quarter of 2014 (3Q14) following the coup in May last year, said CB Richard Ellis (CBRE) executive director James Pitchon.

“We expect to see an increasing number of condominium launches at the end of this year. While there was impressive response from buyers for some newly-launched projects this quarter, the lack of a V-shaped economic recovery may potentially restrict residential demand, which would result in increased competition in the condominium market at the end of this year and the beginning of next year,” said Pitchon in the CBRE  Bangkok Overall Market View  3Q14.

“In the downtown market, record-breaking prices have been achieved in 3Q14. CBRE has sold units in five downtown projects at prices of over 300,000 baht (RM32,888.42) per sq m this quarter.”

Prices of newly-launched condominium projects in  downtown locations will continue to rise due to high land prices as well as increasing construction costs, he said.

Pitchon was concerned about the high volume of units in midtown and suburban areas to be completed in the near future.

“We forecast that over 87,000 midtown and suburban condominium units will be completed in the remainder of 2014 and 2015. The key issue is how many speculative buyers of these units will default and how many end-user buyers will be able to get mortgage loans. Banks have tightened their mortgage criteria resulting from the risk of rising household debt,” said Pitchon.

This article first appeared in The Edge Financial Daily, on February 6, 2015.