Thailand
Thailand: DDproperty spots positive trends in Bangkok prices
The trend for Bangkok’s residential property prices remain positive, in line with the economic recovery and improved purchasing power, says DDproperty, a leading online property portal.
DDproperty Property Index said Bangkok’s residential property prices increased throughout 2017 and have risen by over 100% since 2015.
In the last quarter of 2017, the price index climbed to 205, up 3% from the previous quarter.
“Although the index grew at a slower pace in the last quarter of 2017, the 3% (quarter-on-quarter) q-o-q increase maintained the positive momentum of Bangkok’s property market. This indicates that the Thai capital, and indeed, the whole country, have gradually recovered from the economic slowdown, while consumer purchasing power, especially in the upper- and middle-end segments, has improved,” said Kamolpat Swaengkit, country manager for DDproperty, a part of PropertyGuru Group.
Bullish Momentum
Since data was first collected in 2015, the index tracking residential prices has recorded impressive growth of 105%. Looking across different property types, condominium prices (per square metre) remain the highest when compared with land, including single-detached house and townhouse prices. The index for condominium prices reached 154 in the fourth quarter of 2017, a 54% increase from the first quarter of 2015. Townhouse prices showed market-beating growth that quarter, rising 7% q-o-q and 14% year-on-year (y-o-y). Examining price segments further, the index for prices above 15 million baht showed the highest growth with a 12% y-o-y rise and 39% growth in the past two years.
Chatuchak was the district with the highest q-o-q growth at 5%. Bang Na surpassed Phra Khanong to record the second-highest growth in the fourth quarter of 2017 with a 3% increase. The index showed a 75% price rise in less than three years for Bang Na.
“Overall residential property prices are tentatively set to continue appreciating as progress on mega infrastructure projects continues. Meanwhile, the 20-year national strategy (from 2017-2036) is expected to stimulate residential development in Bangkok and other cities, especially those in the Eastern Economic Corridor,” said Ms Kamolpat.
Condo supply dominates market
The Supply Index showed a 7% decline in the fourth quarter of 2017, with the index falling to 240. Developers moved to reduce supply in the market by using attractive promotions and special offers to stimulate demand.
Condominiums account for the highest volume of supply in Bangkok, making up 88% of residential supply. Landed residential properties, such as single-detached houses and townhouses, made up a much smaller proportion of supply in the market. A possible reason for this is that landed property is often purchased for living, rather than for resale or investment.
Watthana district had the highest volume of condominiums in the last quarter of 2017, while Lat Phrao and Klong Sam Wa saw more townhouses and single-detached homes enter the market, respectively.
No signs of oversupply
The Index is expected to register an increase in supply as a large amount of new inventory from both big and small developers is scheduled to enter the market this year. But the property market is expected to recover slowly as household purchasing power remains under pressure from high levels of debt. Despite this, residential market oversupply seems unlikely.
“Supply will remain at high levels as many developers have several new projects in the pipeline for 2018, while take-up rates are still low. But we don’t think this will lead to an oversupply issue as developers are monitoring the situation and are ready to calibrate supply to maintain desired price levels,” said Ms Kamolpat.
“Sellers will benefit from increasing prices in the current residential property market in Bangkok. The index has grown over 100% in less than three years. But buyers can also take advantage of low interest rates and competitive offers from sellers and developers, who are under pressure to reduce [the quantity of] remaining units and release new inventory into the market.”
Source: https://www.bangkokpost.com/business/news/1419050/ddproperty-spots-positive-trends-in-bangkok-prices