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New launches for Q3 2011 were dramatically down compared with the previous quarter by around 74%. Approximately 3,000 units were launched in Q3 compared to around 11,600 in Q2 2011 and was the lowest number recorded in the past three years. Uncertainty regarding government incentives policy has had a direct impact on buyer’s confidence and also developers have put back launching new projects to a time when sentiment will be more favourable based on greater clarity regarding government plans.
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Q2 2011 - Q3 2011
new Supply
lAunCHeS
pRICeS
TAKe-up
THAIlAnd
www.colliers.co.th
Bangkok Condominium MarketHIGHlIGHTS Launches dramatically down for Q3 2011 due to uncertainty regarding government incentive schemesforfirsthomepurchases.
Incentivestargetingmidtohigh-incomeearnerswilllikelyboostpropertiesinthe2-5million bahtrangeastaxadvantageswillfeaturemoreprominentlyforthisbuyersegment.
Uncertaintiessurroundingfuturegovernmentpoliciesregardingresidentialpropertystymie themarket.
SupplyalsofellinQ32011comparedtothepreviousquarteralthoughisexpectedtopickup inQ42011.
New launches for Q3 2011 were dramatically downcomparedwiththepreviousquarterbyaround74%.Approximately3,000unitswerelaunchedinQ3comparedtoaround11,600inQ2 2011 and was the lowest number recorded inthepastthreeyears.Uncertaintyregardinggovernmentincentivespolicyhashadadirect
impact on buyer’s confidence and alsodevelopers have put back launching newprojectstoatimewhensentimentwillbemorefavourable based on greater clarity regarding governmentplans.
Q3 2011 | Condominium
mARKeT IndICAToRS
newly lAunCHed CondomInIum unITS duRInG THe yeAR 2010 – Q3 2011 by QuARTeR
Source: Colliers International Thailand Research
BAngkokCondomInIUm mArketrePort
InQ32011,morethan88%oftotalunitslaunchedarelocatedinurbanBangkokarea.WithinurbanBangkok,thenorthernFringehasshownthehighestnumberswithapproximately1,600unitsor52%fromthetotal.
the outer City east area was second, with more than 600 units.measuressupportingmidtohigh-incomeearnershasmeantastrongperformanceinurbanBangkokincomparisontothesuburbs.
Approximately 4,000 new condominium units were completed andregisteredatthedepartmentofLandinQ32011andthetotalnumberforthewholeofBangkokwasapproximately315,100units,withmorethan25,700unitsscheduledtobecompletedinthelastquarterof2011.the
number of condominium units under construction and scheduled to be completedin2011isthehighestsincetheglobalfinancialcrisisin1997.
Source : Colliers International Thailand Research
Source:departmentofLand,ColliersInternationalthailandresearchremark:thenumberofunitsdoesnotincludeprojectsfromthenationalHousingAuthority
newly lAunCHed CondomInIum unITS In Q3 2011 by loCATIon
AddITIonAl Supply by QuARTeR
COLLIERS INTERNATIONAL | P. 2
Bangkok Condominium market rePort | Q3 2011
ToTAl HISToRICAl Supply by loCATIon To Q3 2011
CumulATIve fuTuRe Supply SCHeduled To be CompleTed duRInG Q4 2011 – 2013 by loCATIon In uRbAn bAnGKoK (AS of Q3 2011)
COLLIERS INTERNATIONAL | P. 3
Source:departmentofLand,ColliersInternationalthailandresearch
Source: Colliers International Thailand Researchremark:SupplydoesnotincludedunitsinSuburbanBangkok
more than204,200 condominiumunits, around65%of the total, arelocatedintheSuburbanBangkokarea.WithintheurbanBangkokarea,thenorthernFringecontainsthemostunitsduetoitsproximitytothecity centre,mass transit connections and relatively lower land prices
comparedtotheCityarea.theouterCityareasareappearingontheradarscreenduetotheextensionoftheBtSacrosstheChaoPhraYariverandfurtheralongSukhumvitroadandthisissettocontinue.
Bangkok Condominium market rePort | Q3 2011
Approximately25,700unitsarescheduledtobecompletedduringtherestof2011.thenorthernFringeareacontinuestobethemainplayerinurbanBangkok,withnearly6,700unitsscheduledtobecompleted
within 2011, followed by the City area with around 5,190 units. It isexpectedthatthenorthernFringewillcontinuetodominatesupplyfortheearlypartofthedecadeinurbanBangkok.
fuTuRe Supply – uRbAn bAnGKoK
theaveragetakeuprateinBangkokfornewlylaunchedunitsinQ32011isapproximately40%.HoweverduetothelimitedamountoflaunchesinQ32011andtheuncertaintyaroundgovernment incentives,thefigure
bearslittleindicationtooveralllongtermmarketsentiment.Buyersaresimplywaitingforclarityregardingproposedincentiveprogrammes.
theaveragesellingpriceofnewlylaunchedunitsinQ32011intheCityareaisthehighestatmorethan tHB 130,000 per sq m from a total of four projects, followed by Southern Fringe area atapproximatelytHB93,000persqmfromonlyonesmallproject.onlyoneprojectwaslaunchedintheouterCity–eastandSuburbanareaandtheaveragesellingpricewasapproximatelytHB55,200persqmandtHB48,900persqmrespectively.
WorthSuppliesCo.,Ltd.launchedtheirfirstprojectonSukhumvitsoi23.rendeSukhumvit23containsatotalof50unitsintheCityareaandsoldoutintwodays.theprojectcomprisesof1–2bedroomunitswithunit
sizesstartingfrom35squaremetrestoaround79.5squaremetresandthe location is not far from BtS Asoke station and mrt Sukhumvitstation.
TAKe-up
AveRAGe SAleS pRopoRTIon of newly lAunCHed unITS In Q3 2011
AveRAGe SellInG pRICeS of newly lAunCHed pRojeCTS by loCATIon, Q3 2011
lAunCH wITH HIGH TAKe up RATeS In Q3 2011
COLLIERS INTERNATIONAL | P. 4
Bangkok Condominium market rePort | Q3 2011
COLLIERS INTERNATIONAL | P. 5
Source : Colliers International Thailand Research
Source : Colliers International Thailand Research
AveRAGe SellInG pRICeS of newly lAunCHed pRojeCTS by pRoxImITy To exISTInG mASS TRAnSIT lIneS, duRInG Q1 - Q3 2011
THe AveRAGe TAKe-up RATe of newly lAunCHed pRojeCTS by pRoxImITy To exISTInG mASS TRAnSIT lIneS, duRInG Q1 - Q3 2011
Forthefirstthreequartersof2011,theaveragesellingpriceofnewlylaunchedprojectsnotmorethan200metresfromBtS/mrtlineswas
approximatelytHB105,000persqmwhichwashigherthanotherareasby13%-65%.
thetake-up rateofprojectsmorethan 1,000metres fromtheBtS/mrtsystemswasthehighest,ataround43%.Projectslocated500–1,000metresfromthemasstransitsystemhadthelowesttake-uprate,
becausethesellingpricewassimilartoprojects200–500metresfrommasstransitsystem.thedifferenceofacoupleofhundredmetrescanhaveahugeimpactonthedesirabilityofacondominiumproject.
Bangkok Condominium market rePort | Q3 2011
mASS TRAnSIT effeCT
COLLIERS INTERNATIONAL | P. 6
thegrowthrateofhousingloansincreasedapproximately2.3%inQ22011comparedwiththefirstquarterof2011.thiswasbecauseoftheprevious government’s policy for first-home buyers with 0% interest
rateinthefirsttwoyearsforunitpricesoflessthan3millionbaht,whichtookeffectinmay2011andlastedforaroundtwomonths.
Source: Bank of Thailand and Colliers International Thailand Research note:excludesnegligibleamountsoffinancingfromothersources.Percentagechangeiscomparablequarter-on-quarter.
HouSInG loAnS foR peRSonAl ConSumpTIon exTended by fInAnCIAl InSTITuTIonS
fInAnCInG
Bangkok Condominium market rePort | Q3 2011
COLLIERS INTERNATIONAL | P. 7
Bangkok Condominium market rePort | Q3 2011
The strong momentum regarding condominium launches has been correctedinthepastthreequartersbasedoninitialpoliciestocoolthemarketandironicallyrecentmeasures,whicharesupposedtostimulatethemarket,creatinguncertaintyamongstbuyersandthereforeleadingtomutedactivityfromdevelopers.
It islikelythatcurrentincentiveswillcontinuetoapplytoexistingandfuturesupplythatcanbecompletedbytheendof2012inorderforfirst
timebuyerstobeeligiblefortaxdeductions.therefore,developerswillfocusattentionontakeupofexistingorforthcomingstock,whichwillprobablyresultincontinueddampenedactivityfornewlaunches.
The condominium market may face further headwinds if further alterationsaremadetogovernmentpolicyandglobalfinancialconcernsdeepenintoasecondrecession.
foReCAST
COLLIERS INTERNATIONAL | P. 10
AppendIx
Bangkok Condominium market rePort | Q3 2011
COLLIERS INTERNATIONAL | P. 11
ZonInG
HISToRICAl Supply by yeAR
CumulATIve Supply In bAnGKoK
Bangkok Condominium market rePort | Q3 2011
• CITY AREAtheareacoversfouradjacentbutcompetingsub-markets:theSukhumvitsectioncomprisingSukhumvitroadbetweenSoi1andSoi55tothenorthandSoi2andSoi38tothesouth;theCentralLumpinisectionincludingPhloenChitroad,rama Iroad,Soi Langsuan,SoiSarasin,Chitlom road, ratchadamri road, Witthayu road and rachaprasongroad;theSilom/Sathornsection;andtheriversidesectionfrontingtheChaoPhrayariveralongCharoenkrungroadandCharoennakornroad,whereseveralfive-starhotelsarelocated.theCityareaisconvenientforbusinesspersons,expatriatesandtourists,becauseofitsproximitytomanyofficebuildings,retailingandlocalattractions. • CITY FRINGE AREAthisareacoversthreepartsofBangkok:
northern fringe: This section covers the BTS route starting from Ratchathewi Station to moChitStationtothenorthandthemrtroutestartingfromPetchaburistationtoBangsuestationtothenorth. Southern fringe:
this section covers narathiwad ratchanakarin road, Chan road,Sathupraditroad,CharoenkrungroadandramaIIIroadalongtheChaoPhrayariver. eastern fringe:
thissectioncoverstheBtSroutestartingfromthongLorStationtoonnutStationtotheeast,ramaIVroadandPetchaburiroad.
This area covers locations with their own local infrastructure and convenient transportation. However, commuting is required to haveaccesstothecentralbusinessandentertainmentareas.
• OUTER CITY AREAtheareacoverstwopartsofBangkok:
outer City (east):
thissectionstartsfromtheextensionoftheBtSrouteatonnutStationtotheBangkokboundarytotheeast. outer City (west):
This section starts from the extension of the BTS route at Taksin Station toBangWastation,whichincludestheareafromkrungthonburiroadtoratchaphruekroadnearPetchakasemintersection.
• SUBURBAN BANGKOKthesearetheenvironsoutsidetheareasalreadymentioned.expansionof the mass transit system is the main determinant for increasing future supplyinaparticulararea.theexpansionfromonnuttoSamutPrakarnis scheduled to be completed in2011. theexpansionof theBtSwillbenefitdirectly the surroundingcondominiums, as itwill considerablyreducetransportationcostsandtime.thiswillencouragethedevelopmentofnewcondominiums inthisarea.SuburbanBangkok representsthebiggestareaandforthepurposesofthisreportandincludesBangkokcity’soldtown(kohrattanakosinareaandboundaryarea).thislocationhascomprehensivetownplanningcontrolsrestrictingbuildingheight,sotherearenocondominiumprojectsinthearea.
COLLIERS INTERNATIONAL | P. 12
Bangkok Condominium market rePort | Q3 2011
CollIeRS InTeRnATIonAl THAIlAnd mAnAGemenT TeAm
ProJeCtSALeS&mArketIngmonchaiorawongpaisan|Seniormanager reSIdentIALSALeS&LeASIngSunateLawskul|Seniormanager oFFICe&IndUStrIALSerVICeSnarumonrodsiravoraphat|Seniormanager retAILSerVICeSAsharawanWachananont|Seniormanager AdVISorYSerVICeS|HoSPItALItYJeanmarcgarret|director AdVISorYSerVICeSnapatrtienchutima|Associatedirector
reALeStAtemAnAgementSerVICeSBandidChayintu|Associatedirector
InVeStmentSerVICeSnukarnSuwatikul|Associatedirector Wasanrattanakijjanukul|Seniormanager
reSeArCHtonyPicon|AssociatedirectorSurachetkongcheep|Seniormanager
VALUAtIon&AdVISorYSerVICeSnicholasBrown|AssociatedirectorPhachsanunPhormthananunta|Associatedirector Santipongkreemaha|Seniormanager WanidaSuksuwan|manager PAttAYAoFFICemarkBowling|SeniorSalesmanagerSupanneeStarojitski|SeniorBusinessdevelopmentmanager/officemanager
CoLLierS internationaL thaiLand:
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ReSeARCHeR:
ThailandtonyPiconAssociatedirector|researchemAIl [email protected]
ReSeARCHeR:
ThailandSurachetkongcheepSeniormanager|researchemAIl [email protected]
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Bangkok Condominium market rePort | Q3 2011
