The adjustment of the Loan-to-Value (LTV) ratio by the Bank of Thailand, which will officially take effect on April 1, 2019, along with the new land and building tax collection criteria, the rising land prices, and the overall economy that has not shown clear growth, coupled with public uncertainty regarding the new government, are all factors that significantly impact the real estate sector, particularly in the condominium segment. It was observed that during the second quarter of 2019, many developers slowed down the launch of new projects and focused on reducing prices for existing projects that had already been completed. Some developers even reduced prices by more than 30% to clear their remaining stock. According to the research department of Colliers International Thailand, approximately 26 new condominium projects were launched in Bangkok during Q2 2019, totaling 9,632 units with an investment value of 74.87 billion baht. This represents an increase of 1,189 units or 14.1% from the previous quarter and an increase of 1,121 units or 13.2% from Q2 2018. As a result, in the first half of 2019, there were 18,075 newly launched condominiums with a total investment value of approximately 120.302 billion baht, which is a decrease of about 4,486 units or 19.9% compared to the same period last year. The data indicates that in Q1 2019, developers focused on clearing completed units to allow customers to transfer ownership before the new LTV measures were implemented, resulting in fewer new project launches. In the first two months of Q2, developers continued to refrain from launching new projects, primarily waiting for the new election to conclude for clarity on the incoming government. Many new projects are expected to be launched in June, the last month of Q2, where the supply of new condominium projects reached 5,100 units, accounting for 52.94% of the total new launches in Q2. Despite facing numerous negative factors, developers must gradually introduce new projects, as delaying them until the second half of the year could pose challenges for them. Additionally, it was found that foreign purchasing power, particularly from Chinese investors, remains strong in the Thai condominium market. Many developers continue to market new projects and those not yet officially launched to Chinese investors. However, since the second half of 2018, there has been a noticeable decline in foreign purchasing power, with Chinese investors focusing on projects located in prime areas such as Rama 9 - Ratchada or central city locations, at reasonable prices, and projects that offer good profit potential. Field observations show that many newly launched projects in the first half of the year still attract significant interest from foreign investors, especially from China, who visit sales offices to view and purchase condominiums through agency referrals.

Supply of Newly Launched Condominiums from Q1 2015 to Q1 2019 by Quarter

Source: Research Department, Colliers International Thailand

          In Q2 2019, approximately 26 new condominium projects were launched in Bangkok, totaling 9,632 units with an investment value of 74.87 billion baht, which is an increase of 1,189 units or 14.1% from the previous quarter and an increase of 1,121 units or 13.2% from Q2 2018. This resulted in 18,075 newly launched condominiums in the first half of 2019, with a total investment value of approximately 120.302 billion baht, which is a decrease of about 4,486 units or 19.9% compared to the same period last year. The data indicates that in Q1 2019, developers focused on clearing completed units to allow customers to transfer ownership before the new LTV measures were implemented, resulting in fewer new project launches. In the first two months of Q2, developers continued to slow down new project launches, primarily waiting for the new election to conclude for clarity on the incoming government. Many new projects are expected to be launched in June, the last month of Q2, where the supply of new condominium projects reached 5,100 units, accounting for 52.94% of the total new launches in Q2.

Accumulated Newly Launched Condominiums by Area from Q1 2014 to Q2 2019 by Quarter

Source: Research Department, Colliers International Thailand

          In Q2 2019, approximately 9,632 units were newly launched, with 6,911 units or 71.8% located in inner Bangkok. Outer Bangkok continues to be the area where developers have launched the most condominiums in the past 7 years, totaling 199,440 units or 54.1% of the total new supply of approximately 368,347 units. The northern outskirts (Ratchada, Phaholyothin) accounted for about 50,513 units or 13.7%, while the inner city areas (Sathorn, Silom, early Sukhumvit) accounted for about 44,543 units or 12.1%. Areas along the extension of the subway lines remain new locations where developers choose to launch new projects due to relatively low land costs compared to central city areas. Developers are also expanding opportunities to cater to new customer segments to broaden their customer base.

Average Selling Prices of Newly Launched Condominiums by Area from Q1 2014 to Q2 2019 by Quarter

Source: Research Department, Colliers International Thailand

          The data shows that condominiums priced between 50,000 and 100,000 baht per square meter have been the most developed segment over the past 5 years, with approximately 267,029 units developed. The next segment is priced between 100,000 and 150,000 baht per square meter, with 64,530 units, and those priced at or below 50,000 baht at approximately 25,579 units. However, over the past 5 years, the 100,000 to 150,000 baht per square meter segment has seen the most growth, as land prices in Bangkok have significantly increased during this period, forcing developers to adjust their selling prices in line with rising land costs. In inner Bangkok, it was found that over the past 5 years, new condominium project prices have increased by 10-15% per year, which is higher than the overall average increase of about 8-15% per year.

Average Selling Prices of Newly Launched Condominiums by Quarter


Source: Research Department, Colliers International Thailand

          The average selling price of condominium projects in Q2 2019 was approximately 148,365 baht per square meter, which is an increase of about 45,889 baht per square meter or 44.8% from the previous quarter and an increase of about 13,365 baht per square meter or 9.9% from Q2 2018. This is due to over 71.8% of the newly launched condominiums in Q2 being located in inner Bangkok, where many projects have selling prices exceeding 200,000 baht per square meter, resulting in a significant increase in the selling prices of newly launched condominiums in Q2 compared to the previous quarter.

Newly Launched Condominiums Along the Under-Construction Subway Lines

Source: Research Department, Colliers International Thailand

          The Blue Line subway is the most developed route for condominiums over the past 6 years, with over 35,858 units developed, accounting for 26%. The Blue Line is set to begin trial operations from Hua Lamphong to Lak Song in August and will officially open by the end of the year. However, the section along Charan Sanitwong Road is expected to officially open in 2020. Many major developers are preparing plans to develop new condominium projects along the Blue Line this year, despite the existing supply in the market along this route still being substantial. According to the research department of Colliers International Thailand, the condominium market along the Orange, Yellow, and Pink subway lines is expected to be particularly noteworthy this year, with many new condominium projects anticipated to be developed.

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