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RESIDENTIAL RESEARCH
Bangkok ConDo Market overview Q4 2015
2
FIGURE 1
Supply & New Supply of Bangkok Condominium, 2008-Q4 2015
2008 2009 2010 2011 2012 2013 Q1 2014 Q2 2014 Q4 2014 Q2 2015 Q4 2015Q3 2014 Q1 2015 Q3 2015
10,232 10,23224,149
56,078
38,345
65,559
68,925
12,725
Existing Supply New Supply
11,05316,415
24,777
13,65920,780
8,70914,793
371,406362,697341,917328,258303,481287,066276,013263,288194,363128,80434,381 90,459
HigHligHts
RIsInEE saRIkapUtRaDirector, research and Consultancy
“the perception of the condominium market over-supply has an effect on speculators with low cold cash with many decidedly holding their purchase decisions”
Market Overview
the Bangkok condominium market in
Q4 was expected to be robust after the
government launched its real estate
stimulus programme. However, the
condominium market take-up rate did
not increase as expected. rather, the
number of units taken-up fell by 50
per cent Q-o-Q. it was possible that,
despite the failure to boost new demand
in condominiums, such measure was
helpful in terms of accelerating the post-
sale condominium transfer process.
the overall market was still sluggish
with a drop in unit take-up rate by 1 per
cent Q-o-Q. the new supply in Q4 was
almost double the new supply in Q3,
as there were more large projects with
up to 1,000 units launched in Q4. there
were 57,941 units added to the market
in 2015 representing 11 per cent less
than the number of units launched in
2014. in fact, this is the lowest number
of new supply since 2011 when massive
floods threatened Bangkok. a similar
trend could be observed on the demand
side where there was a Y-o-Y plunge of
20 per cent in terms of units sold. this
might be a sign of downturn in Bangkok’s
condominium market.
Supply
as of Q4 2015, the accumulated supply
of Bangkok condominiums was 386,199
units, representing a 4 per cent increase
from the previous quarter. the new
supply added in Q4 totalled 14,793
units, soaring 70 per cent, from 8,709
units of new supply launched in Q3.
this proved that the government’s real
estate stimulus programme was at the
very least effective on the supply side,
where developers decidedly launched
more projects than the previous quarter.
it was noticeable that the increasing
number of new supply in Q4 was caused
by four large projects, which accounted
for 25 per cent of the total new supply.
these are life Pinklao, Plum Condo Park
rangsit (Phase 3), Plum Condo Central
station (Phase 2) and lumpini sukhumvit
76. the total accumulated supply in 2015
went up by 17 per cent compared to the
end of 2014. if comparing only the new
supply, 2015 recorded a decrease of 11
per cent, compared to the new supply in
2014. the overall thai economy faced a
number of downside risks in 2015 such
as slow growth, reduction in exports
and lowered consumer confidence – all
of which have an effect on developers’
project launch decisions.
• ThetotalsupplyofBangkokcondominium
as of Q4 2015 was 386,199 units, increasing 4
per cent Q-o-Q.
• Therewere14,793newcondominium
units launched in Q4, 2015. this number was
almost double the new supply added to the
market in the previous quarter.
• In2014,64,970unitsofnewsupplywere
added into the market. the number of units
launched in 2015 was 57,941 units, representing
an 11 percent fall of new supply added.
• Despitethegovernment’srealestate
stimulus programmes, the number of take-up
units decreased by almost half Q-o-Q.
• Comparingthemarketabsorptionrate
between 2014 and 2015, the Bangkok
condominium market appears to have similar
performance, with 84 per cent and 87 per
cent, respectively.
• Theaveragesellingpriceofcondominiums
in the CBD increased by 1.6 per cent Q-o-Q.
City Fringe and Peripheral areas saw a slight
increase in price by only 0.4 per cent Q-o-Q.
• Weexpecttoseemanyupcomingpremium
projects in 2016 especially in the Mid-sukhumvit
area. in contrast, the development plan of new
condominiums in the Peripheral would slow to
make room for existing inventories to be
taken up.
source : knight Frank thailand research
3
RESIDENTIAL RESEARchBANgkok coNDo Q4 2015
FIGURE 2
Q4 2015 New Supply by Location
FIGURE 3
Accumulated Supply, Demand and Take-up rate of Bangkok Condominium, 4Q 2015
similar to the previous quarters, most
of the new supply was located in the
Peripheral areas. the City Fringe and
CBD new launches accounted for 21
per cent and 6 per cent of the total Q4
2015 Bangkok supply, respectively. this
proportion remained unchanged from the
last quarter. However, from a yearly point
of reference, the new supply by location
from the previous year saw new supply in
the City Fringe grow from 18 per cent to
21 per cent, whereas the new supply in
the CBD dropped from 11 per cent to 6
per cent. this means the lack of available
land plots fit for development in the CBD
has become even more severe.
Demand
Despite the stimulus measures launched
in early Q4, the number of sold units
plunged nearly 50 per cent Q-o-Q. this
caused the accumulated take-up rate to
drop slightly from 87.8 per cent in Q3 to
86.9 per cent in Q4. this is the first time
in historical data that we saw a dip in the
take-up rate since 2008. we believe that
the contracted demand in this quarter
reflected a real demand from end-users
rather than speculative buyers, as we
have previously seen in the market. the
perception of the condominium market
over-supply has an effect on speculators
with low cold cash with many decidedly
holding their purchase decisions, fearing
the inability to resell their purchased
units before the transfer date. active
speculators in the current market
situation often eye specific projects that
are the upper-middle segment where the
proximity to the mass transit nodes is the
key selling point, or where advertised as
the “last plot available” in a certain area.
But for many of the buyer-occupiers in
the lower to middle market segment, loan
rejections have proved to be an issue
with banks tightening their the mortgage
lending criteria to diminish their downside
risks. the current rejection rate is roughly
10 to 15 per cent per project in this
segment.
source : knight Frank thailand research
source : knight Frank thailand research
Pricing Trend
Condominiums in the CBD continued to register a steady growth with an average selling price increasing by 1.6 per cent Q-o-Q to approximately 217,706 baht per square metre. whilst in the Fringe and Peripheral areas, the price levels registered only a slight increase of 0.4 per cent Q-o-Q, representing 128,649 baht per square metre and 73,388 baht per square metre, respectively. the most impressive Y-o-Y segment is the CBD with a rise of 14.6 per cent, following by the City Fringe with a rise of 9.5 per cent. the slowest annual price increase is found in the Peripheral with a modest 4.8 per cent increase from last year.
the average selling price in the CBD is expected to rise in 2016 as a result of land scarcity. in addition, developers now are back in the “safe development strategies”, where they try to add value to their products with premium materials and superior/edgy design, contrasting the previous strategy, which overly leveraged the project location and rental return guarantee. the Peripheral is forecasted to see an even slower growth of the average selling price per square metre since the accumulated unsold inventory remains relatively high.
450,000 100.0%
2008
2009
2010
2011
2012
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
90.0%
80.0%
70.0%
60.0%
50.0%40.0%
30.0%20.0%
10.0%
0.0%
400,000350,000300,000250,000200,000150,000100,000
50,000
0
Supply Demand Sold Rate
CBD / 6 %
City Fringe / 21 %
Peripheral / 73 %
4
REcENT mARkET-LEADINg RESEARch puBLIcATIoNS
For the latest news, views and analysison the world of prime property, visit
KnightFrankblog.com/global-briefing
GLOBAL BRIEFING
Thailand Contacts
Phanom KanjanathiemthaoManaging Director+66 (0)2643 8223 ext [email protected]
Chaturawit Wattanaprukexecutive Director+66 (0)2643 8223 ext [email protected]
Surasak Limpa-Arayakulexecutive Director, Head of valuation and advisory+66 (0)2643 8223 ext [email protected]
Roong Sitthisankunchornexecutive Director, Head of Property Management+66 (0)2643 8223 ext [email protected]
Marcus Burtenshawexecutive Director, Head of Commercial agency+66 (0)2643 8223 ext [email protected]
Frank Khanexecutive Director, Head of residential +66 (0)2643 8223 ext [email protected]
Risinee SarikaputraDirector, research and Consultancy+66 (0)2643 8223 ext [email protected] Phuket ContactNattha Kahapanaexecutive Director, knight Frank Phuket+66 (0)7631 8151 ext [email protected]
Q1 2015 BangkokCondominiumMarket
Q2 2015 Bangkokcondominium market
1H 2015 Bangkoksuper Prime and Prime CondominiumMarket
Q3 2015 Bangkok Condominium Market
Q1 2015BANGKOK CONDOMINIUM MARKET overview
research
• Oversixyearsandaquarteryears,theaccumulatedsupplyofBangkokcondominiums,asofQ12015,was381,772units,increasingby3.7%fromQ42015.
• NewlaunchesofBangkokcondominiumsduringQ12015wasapproximately13,737units.
• Majorityofthenewcondominiumsupplywaslocatedintheperipheralarea,comprisingapproximatelyx.69.1%ofthetotalsupply.NThenewlylaunchedofcondominiumslocatedintheCBDandCityFringeareawasmadeup19%and12%,respectively.
• Thetake-uprateoftheoverallBangkokcondominiummarketdroppedto44.3%inQ12015,from46.9769%duringthelastquarterof2014.
• DuringQ12015,wehaveseentheasignificantincreaseofcondominiumsellingpricesintheCBDarea,increasingby8.2%,fromTHB182,797persquaremetreinthepreviousquartertoTHB197,779persquaremetre,whereasthesellingpriceofthecCityfFringecondominiumsincreasedby5.3%fromTHB142,108persquaremetreinthepreviousquartertoTHB149,676persquaremetre.
highlight
Important Notice© Knight Frank LLP 2016 – this report ispublished for general information only andnot to be relied upon in any way. althoughhigh standards have been used in the preparation of the information, analysis, viewsand projections presented in this report, noresponsibility or liability whatsoever can beaccepted by knight Frank llP for any loss ordamage resultant from any use of, reliance onor reference to the contents of this document.as a general report, this material does notnecessarily represent the view of knight FrankllP in relation to particular properties or projects. reproduction of this report in wholeor in part is not allowed without prior writtenapproval of knight Frank llP to the form and content within which it appears. knightFrank llP is a limited liability partnership registered in england with registered numberoC305934. our registered office is 55 Bakerstreet, london, w1U 8an, where you maylook at a list of members’ names.
RESIDENTIAL RESEARCH
BangkokcondominiUm market Q2 2015
RESIDENTIAL RESEARCH
Super prime and prime Condominium market overview, 1H 2015
RESIDENTIAL RESEARCH
Bangkok Condominium market overview 2015
knight Frank Research, Reports are available at knightFrank.co.th/Research
FIGURE 4
Bangkok Condominium Average Selling Price, 1H 2008-Q4 2015
source : knight Frank thailand research
Outlook
the Bangkok condominium market
in Q4 2015 experienced a decline in
demand but an increase in supply,
especially in the Peripheral, which was
almost double of that in Q3. in terms of
annual performance, new supply and
the number of units sold decreased
from 2014 by 11 per cent and 20 per
cent, respectively. Both downward
trends reflect a stagnant market in 2015,
which was mainly caused by lack of
confidence in the condominium market
and the overall economy, as well as by
tightening lending criteria from retail
banks. a slowdown in the condominium
market during Q4 could filter some fast-
moving speculators out, leaving buyer-
occupiers and speculative buyers with
high purchasing power in the market.
the highest rise in average selling
price per square metre encompassed
condominiums in the CBD with 1.6 per
cent rising Q-o-Q, four times as high
as the numbers from the City Fringe
and Peripheral areas. 2016 will be a
challenging year for small to medium
developers with projects in the Periphery
as buyers become more cautious with
purchase decisions, whereas in the CBD
we would see listed developers starting
to differentiate their premium offerings
with more emphasis on unit layouts and
designs as they try to win over an even
smaller pool of high net worth individuals
who are still seeking to purchase
condominiums.
Contributors to this report:
- Patinee Prapasitsilp ProPertY analYst
- Panon leelamanit researCH & aDvisorY assistant Manager
Q3
2015
Q4
2014
Q4
2015
190,047
117,435
70,049 73,063 73,388
128,135128,649
214,188217,706
250,000
200,000
150,000
100,000
50,000
0
CBD City Fringe Bangkok Peripheral
