Bangkok Condominium Market Overview Q1 2020 - Residential Research - Knight Frank
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Residential Research
Bangkok Condominium
Knightfrank.co.th/Research
Market Overview Q1 2020
BANGKOK CONDOMINIUM MARKET OVERVIEW Q1 2020
HIGHLIGHTS
1 2
THE ACCUMULATED SUPPLY OF BANGKOK ONLY 1,791 UNITS WERE SOLD FROM THE NEW SUPPLY
CONDOMINIUMS INCLUDED 629,388 UNITS AT THE END DURING THE FIRST QUARTER OF THIS YEAR FROM A
OF Q1 2020; A GRAND TOTAL OF 6,007 UNITS FROM 20 TOTAL OF 6,007 UNITS, REPRESENTING A 30 PER CENT
PROJECTS WERE LAUNCHED DURING Q1 2020. THE SALES RATE - AND REFLECTING A 9 PER CENT DROP IN
NEW SUPPLY IN Q1 2020 DECREASED BY 53.4 PER CENT, SALES WHEN COMPARED TO THE SAME PERIOD IN THE
COMPARED WITH THE NEW SUPPLY IN Q1 2019. PREVIOUS YEAR OR A 20 PER CENT DECREASE WHEN
COMPARED WITH THE PREVIOUS QUARTER.
3 4
FOR THE SURVIVAL OF EACH COMPANY, IT IS APPARENT THE TRENDS OF THE CONDOMINIUM MARKET IN
THAT MANY OPERATORS ARE TRYING TO ENGAGE IN BANGKOK FOR THE REMAINING 9 MONTHS OF THIS
MARKETING SCHEMES TO CREATE SALES, INCLUDING YEAR WILL INCLUDE A SLOWDOWN IN THE LAUNCHES
DISCOUNT PROMOTIONS FROM 20 PER CENT UP TO 50 OF NEW CONDOMINIUMS FOR SALE - ESPECIALLY
PER CENT FOR SOME UNITS IN PROJECTS THAT WERE THE LARGE CONDOMINIUM PROJECTS AND HIGH-
COMPLETED OR EXPECTED TO BE COMPLETED WITHIN PRICED CONDOMINIUMS, LARGE-SCALE PROJECTS
THIS YEAR - IN ORDER TO TRY TO ATTRACT CUSTOMERS THAT REQUIRE MORE THAN 5 YEARS TO DEVELOP, AND
TO VISIT THE PROJECT. HOWEVER, REGARDING THE CONDOMINIUMS THAT FOCUS ON SELLING TO INVESTORS
ASKING PRICES OF NEWLY LAUNCHED CONDOMINIUMS AND FOREIGNERS.
IN BANGKOK, IT WAS FOUND THAT THE PRICE LEVEL
INCREASED IN ALL LOCATIONS. THE ASKING PRICE OF
CONDOMINIUMS IN THE CBD WAS 268,300 BAHT PER
SQUARE METRE, WHEREAS THE ASKING PRICE OF
CONDOMINIUMS IN THE CITY FRINGE AND THE SUBURBS
WAS 149,600 AND 81,150 BAHT PER SQUARE METRE,
RESPECTIVELY.
“ The condominium market in the first quarter of 2020
has been relatively slow in terms of both supply and
demand. The market at the moment is considered to
be a buyer’s market, where the buyers’ bargaining
power can push condominium price levels below the
market prices.
“
RISINEE SARIKAPUTRA
Director, Research and Consultancy
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BANGKOK CONDOMINIUM MARKET OVERVIEW Q1 2020
Market Overview
2020 marks a sluggish year for the Bangkok condominium market. The condominium market in the first quarter of 2020 has
been relatively slow in terms of both supply and demand - due to the outbreak of the new coronavirus strain, or Covid-19. The
outbreak began in late January 2020, and in March, it became more severe. As a result, from mid-March to April, there were
no new condominiums launched for sale in Bangkok. Projects that had planned launches postponed them to the last quarter
of the year. As many companies implemented a work-form-home policy for employees, the sales office of many condominium
projects closed and stopped services. Customers could, however, view the projects by calling in advance. The sales approach
has shifted to the digital platform; many companies are now using applications to communicate with customers, including
sales via LINE, websites and apps, with virtual project visits via VDO call, Live Youtube, and Facebook or unit reservations
using various online booking formats.
Supply of Newly Launched Condominiums Q1 2016 - Q1 2020 Supply Trend
As the end of Q1 2020, the accumulated
supply of Bangkok condominiums
included 629,388 units. In Q1 2020,
there were approximately 6,007 new
condominium units from 20 projects added
to the supply. The new supply in Q1 2020
decreased by 53.4 per cent, compared
with the new supply in Q1 2019. The main
reason for the decreasing of new supply
in Q1 2020 was the Covid-19 pandemic.
The majority of new supply in Q1 2020
was Grade C condominium representing
58 per cent of total, followed by Grade B
Source: Knight Frank Thailand Research
and Grade A condominiums, representing
27 per cent and 14 per cent, respectively.
Supply of Newly Launched Condominiums by Grade, Q1 2020 The new supply of Super Prime and
Prime condominium was only 1 per cent
of the total. In Q1 2020, up to 56 per cent
of the newly launched units were located
in the suburbs of Bangkok, followed by
28 per cent in the City Fringe and only 16
per cent in the Central Business District
(CBD).
Demand Trend
The outbreak of the new coronavirus
strain, or Covid-19, resulted in a clear
decline in purchasing power in new
condominium projects launched in the
Source: Knight Frank Thailand Research
first quarter of 2020. Only 1,791 units
were sold from the new supply during
Supply of Newly Launched Condominiums by Location, Q1 2020
the first quarter of this year from a total
of 6,007 units, representing a 30 per cent
sales rate – and reflecting a 9 per cent
drop in sales when compared to the same
period in the previous year or a 20 per
cent decrease when compared with the
previous quarter. In March, the outbreak
of Covid-19 was especially severe,
resulting in a decrease in the number of
people visiting projects. In addition to new
condominium sales decreasing, concerns
remain about the number of condominium
transfers for projects that are completed
and ready to be transferred this year
Source: Knight Frank Thailand Research amidst the nationwide lockdown. As such,
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BANGKOK CONDOMINIUM MARKET OVERVIEW Q1 2020
Supply, Demand and Sales Rate of Newly Launched almost every business stopped close to
Condominiums, from 2016 - 2020 100 per cent of their activities. Naturally,
when businesses stop operating, there
is an inevitable effect on employment in
various business organisations. In some
cases, businesses have decreased their
employee numbers and reduced the
salaries of employees. In turn, this has
caused many people to lose their jobs,
lack in income or have reduced income.
Buyers may be unable to complete
their transfers, as banks are also more
cautious in granting loans for real estate.
It is expected that the loan rejection rates
are likely to increase this year.
Source: Knight Frank Thailand Research
Quarterly Asking Prices of Condominiums by Location,
Selling Price Trend
2016 - 2020 For the survival of each company, it is
apparent that many operators are trying
to engage in marketing schemes to create
sales, including discount promotions from
20 per cent up to 50 per cent for some
units in the projects that were completed
or expected to be completed within this
year - in order to try to attract customers
to visit the project. In addition, there are
many other promotions, such as waiving
of charges on the day of transfer, which
includes the transfer fee of 1 per cent of
the appraised price (only for customers),
Source: Knight Frank Thailand Research
stamp duty fee, installation and insurance
fee for the electricity meter, common
facilities fee for 1 year, and initial capital
fund contribution. In addition, some
companies have promotions that attract
both investors and those who buy
residences for their own occupancy
(real demand), which include coverage
of 2 years of instalment payments. For
customers who have already bought
condominiums and are in the process
of making their down payment, many
companies implemented measures to
help, as many of the customers from
temporarily halted businesses, like
hotel staff, airline staff, restaurant staff
and department store staff, may be
experiencing the difficulties of having no
income. Many companies have helped
customers who are having problems
with the suspension of temporary down
payments, beginning at 3 months.
However, the slowdown in real estate
has been good for investors with savings
and cash in their pockets; such investors
have taken this opportunity to buy
condominiums at prices that have been
reduced to below market rates, in order
to make a profit when the economy has
recovered. As some projects only take the
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BANGKOK CONDOMINIUM MARKET OVERVIEW Q1 2020
reservation payment and the rest of the trying to reduce prices in order to attract condominium buyers due to the conve-
payments when ownership is transferred, customers. The condominium market at nient access to many shopping and
an investor can purchase a unit in such a the moment is considered to be a buyer’s transportation centres. The City Fringe
project with a 2-year instalment payment market, where the buyers’ bargaining Area can be divided into the following
promotion. They will then not have to pay power can push condominium price sub-areas:
anything out of pocket for 2 years when levels below the market prices; buyers
the economy has not yet recovered. would subsequently be able to resell their • SKV 44-70 SKV 65-103 :
purchases at a good price in the future This area encompasses the edge of
However, regarding the asking prices when the economy has revived. Sukhumvit Soi 65 to Sukhumvit Soi 77 as
of newly launched condominiums in well as the edge of Sukhumvit Soi 44 to
Bangkok, it was found that the price level Sukhumvit Soi 50.
increased in all locations. As of Q1 2020, Location Definitions
the asking price of condominiums in the • Ratchada / Rama 9 / Ladprao :
Central Business District was 268,300 Central Business District (CBD) : This is the area along Ratchadapisek
baht per square metre, increasing from This is the Central Business District area Soi 1 to Soi 17 and Soi 2 to 28; Ladprao
Q1 2019’s price of 263,500 baht per as well as the area that surrounds it; it is along Ladprao Soi 1 to Soi 23 and Soi 2
square metre, representing an increase popular for expatriates, tourists and upper to Soi 28; and Rama 9 Road, covering the
of 1.8 per cent, or increasing by 0.1 per class Thais for both for shopping and Ratchada/Rama 9 intersection to Rama 9/
cent from Q4 2019. The asking price of residences. It also includes areas along Wattanatham Road.
condominiums around the City Fringe as the Chao Phraya River on Charoen Krung
of Q1 2020 was 149,600 baht per square and Rama III Roads. The CBD Area can • Phahonyothin / Phayathai :
metre, reflecting a 1.9 per cent increase be divided into sub-areas as follows: This is the up-and-coming area that offers
from the previous year, where the price convenient access to many academic
was 146,700 baht per square metre, or • Silom / Sathorn : institutions and government agencies.
increasing by 0.07 per cent from Q4 2019. This is the area that encompasses The area covers Phahonyothin Road
The asking price of condominiums in the Sathorn Road, Silom Road and the sois between Soi 1 to 15 and Soi 2 to 20.
suburbs of Bangkok as of Q1 2020 was in between such as Sala Daeng, Nang
81,150 baht per square metre, increasing Linchee, etc. • Petchburi Road :
at the rate of 1.7 per cent from Q1 2019’s This area covers Petchburi Road from
price of 79,800 baht per square metre, or • Prime Sukhumvit (Prime SKV) : Nikhom Makasan intersection to the
increasing by 0.2 per cent from Q4 2019. This is the section of Sukhumvit Road intersection of Petchburi and the end
between Soi 1 to 63 (North side) and Soi Sukhumvit Soi 63.
2 to 42 (South side).
Outlook • Charoen Nakorn/Thonnburi :
• Central Lumpinee (CL) : This area stretches along the Chao
The trends of the condominium market in The area encompasses Ploenchit Road Phraya River from Krungthep Bridge to
Bangkok for the remaining 9 months of this (end of Sukhumvit Road), to Rajdamri, Krungthonburi Bridge.
year include a slowdown in the launches Ratchaprasong, Wireless Road, Chidlom
of new condominiums for sale - especially Road, Soi Tonson, Soi Langsuan, Sarasin • Bangsue / Tao Poon / Pracharat :
the large condominium projects and high- Road, Rajdamri Road, Ratchaprasong This area covers Samsen Road, Thaharn
priced condominiums, large-scale projects Road, Rama 1 Road and Phayathai Road. Road, Pracharat Sai 1, Pracharat Sai 2,
that require more than 5 years to develop, The area is popular with expatriates, and Krungthep-Nonthaburi Soi 1-39 and
and condominiums that focus on selling tourists and affluent Thais. Soi 2-50.
to investors and foreigners. Condominium
projects launched for sale this year • Charoenkrung / Narathiwad / Rama 3 : Bangkok Peripheral Area :
will focus on selling to buyers with real This is the area that stretches along The three major areas under this classi-
demand. The selling price level will not Charoen Krung Road of the Chao Phraya fication are :
exceed 100,000 baht per square metre. River southward just past the Sathorn
The trend of condominiums is likely to Bridge, and to the north of Sipraya Road • Eastern Bangkok :
slow both in terms of supply and demand, as well as the area along both sides of This covers the following roads: Bangna,
and it is expected that it will take another Narathiwas Road. Srinakarin, Ramkamhaeng, Theparak,
2 years for the condominium market to Romklao and Chalermprakiat.
improve. There are still around 100,000 • Surawongse / Samyan / Siphaya :
units remaining units for sale in Bangkok. This is the area on Surawongse Road, • Late Sukhumvit :
However, the delay in the launches of Samyan Road and Siphaya Road as This is the section of Sukhumvit Road on
condominiums will benefit the market in well as some parts of Rama 4, which are both sides after Sukhumvit Soi 105 and
Bangkok, providing opportunities to sell located near the mentioned roads. 70, stretching to Samutprakran.
outstanding stock. Also, postponing the
launch of new projects would result in City Fringe Area : • Northern Bangkok :
reduced competition in the market. As for The area is located on the edge of the This area covers the road along the
condominiums that will be completed this CBD, and provides easy access to the northern part of Bangkok, which include
year, it has been found that operators are CBD. This area is an alternative for Ngamwongwan, Chaengwattana, Ratta-
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BANGKOK CONDOMINIUM MARKET OVERVIEW Q1 2020
nathibet and Sanambin Nam.
• Southern Bangkok :
This is the area covering the followings
roads: Petchkasem, Ratchapruk, Kala-
prapruk, Charansanitwongse and Wuttha-
kart.
• Late Ratchada / Ratchayothin / Late
Ladprao :
This area covers Ratchada from Soi 19
and Soi 30 to the end; Ladprao from
Soi 25 and 30 to the end; Ratchayothin
Road; and Kaset Navamin, Ramindra and
Nuanchan Roads.
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RISINEE SARIKAPUTRA
Director, Research and Consultancy
+66 (0)2643 8223 Ext 180
risinee.sarikaputra@th.knightfrank.com
Knight Frank Research, Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range
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