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Thailand: Condos, low-rise homes still hot
Thailand’s overall residential market in 2018 is expected to stay positive and continue improving from last year with growth of 7.9% on the demand side and 10.9% on the supply side, largely due to stronger confidence and a robust economy.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the market this year will continue to grow, with improving figures across the board.
The total amount of residential supply nationwide this year is forecast to rise by 3.4% to 265,500 units from 256,600 in 2017. The total will include 111,300 condominiums, up 5.9%, and 154,200 low-rise houses, up 1.8%.
In Greater Bangkok, the amount will rise by 4.3% to 154,200 units, comprising 79,900 condo units, up 8.6%, and 74,300 low-rise houses, up negligibly from 74,200 in 2017.
In the provinces, the amount of residential supply will total 111,300 units, up 2.2%. The number of low-rise houses will rise by 3.4% to 79,900, while condo supply will drop 0.6% to 31,400 units.
In Greater Bangkok, the number of new residential units being launched this year will total 117,100, up 2.8% from last year’s 113,926, which in turn was up 7.9% from 2016.
The key driver in 2018 will be condominiums with estimated growth of 6%, while low-rise houses will see growth of 2%.
The REIC estimates the amount of new residential supply this year from the number of land allocation permits for low-rise housing supply and the number of building construction licences for condominiums, Mr Vichai said.
Based on analysis of the figures for supply and demand during the past five years, the absorption rate of residential units nationwide this year will improve to 39.8% from 38.9% last year.
The absorption rates of condominiums and low-rise houses will rise to 47.9% and 33% from 46.5% and 32%, respectively.
In Greater Bangkok, the absorption rate will improve to 44.5% from 43.2%. By segment, the condo absorption rate will rise to 53.4% from 52% in 2017 and 49.6% in 2016. The rate for low-rise houses will be 36.3%, up from 34.6% in 2017 and 33.4% in 2016. In the provinces, the absorption rate this year will be 28.7%, down from last year’s 31.4%. The absorption rate of low-rise house will decrease to 25.9% from 28.1%. In the condominium segment, it will decline to 32.1% from 35.3%.
“The Greater Bangkok market outlook will be better than that of the provinces, as the capital’s key driver is condominiums,” Mr Vichai said. “In the provinces, market growth is mainly in townhouse and single-house segment.”
Mr Vichai said the residential market’s improvement continues since the fourth quarter of last year when compared with the same periods of 2016. The market was in a year- on-year contraction in the first quarter of 2017, as property tax incentives ended in April 2016 and spurred unusual growth in the first quarter of 2016.
The REIC announced the top five locations in Greater Bangkok for the largest number of newly launched residential units last year.
For condo, the largest number was in the Thon Buri area with 9,478 units, accounting for 13.6%. It was followed by Huai Khwang-Chatuchak-Din Daeng with 8,885 units (12.7%), lower Sukhumvit with 7,185 (10.3%), Nonthaburi with 5,586 (8%) and Phaya Thai-Ratchathewi with 5,198 (7.4%). Most units in these five locations were priced between 2 million and 3 million baht. For low-rise houses, the greatest amount of newly launched supply was in Samut Prakan with 8,557 units (19.3%), followed by Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sue with 8,406 (19%).
Source: https://www.bangkokpost.com/business/news/1424795/condos-low-rise-homes-still-hot