Mr. Sanchai Kueakchai, Director and Head of Research and Consulting at Knight Frank Thailand Co., Ltd. stated that there has been an increase in condominium supply in the last quarter of 2021 after a slowdown in new project launches during the first to third quarters of the year. This was due to the government's easing and lifting of lockdown measures, as well as the reopening of the country to welcome tourists, particularly through the Test & Go program. Additionally, the Bank of Thailand temporarily relaxed LTV measures until the end of 2022, leading developers to view this as an opportune time to launch new projects, focusing solely on real demand that represents the main purchasing power at this time.

The total supply as of Q4 2021 was 11,252 units, which is a 62.7% increase compared to the same period last year and a 79.5% increase compared to the previous quarter, accounting for nearly 56% of the total market supply for the entire year of 2021, which totaled 20,015 units. New projects launched were primarily located in suburban areas, making up 76% or 7,117 units, while the areas around the Central Business District (CBD) accounted for 13% and the CBD itself for 11%.

Focusing on condominiums priced at 3 million baht
New supply for sale is dominated by large developers, accounting for 70% of the total supply available. Condominiums launched in this quarter are priced between 900,000 and 3.5 million baht. When categorized by grade, 63% are Grade C condominiums and 37% are Grade B, indicating that developers are choosing to sell condominiums at an average price of approximately 80,000 to 100,000 baht per square meter, as this is the product that attracts the main purchasing power at this time.

The number of newly sold condominiums in this quarter was 2,835 units, representing a sales rate of 25.2%. This sales rate decreased by 8% compared to the same period last year and by 12.8% compared to the previous quarter. The decline in sales rate is attributed to the high number of new units available for sale while the number of sold units remains low, as many projects are only selling reservation certificates. Despite the low sales volume, it is assured that the sold units will not be canceled, as projects are increasingly assessing customer potential to ensure actual sales closure. This may lead to a decrease in loan rejection rates in the future, with most buyers being from the middle-income group who have stable incomes, outnumbering investors. The projects for sale are located in suburban areas, which are primarily residential zones, thus attracting real demand buyers who are ready to purchase, especially for units priced below 3 million baht.

The selling prices of condominiums in Bangkok as of Q4 2021 decreased across all areas. In the CBD, prices dropped by 4.6% year-on-year to 239,689 baht per square meter, while prices in the areas around the CBD decreased by 6.3% year-on-year to 115,659 baht per square meter, and in suburban areas, prices fell by 8.2% year-on-year to 63,258 baht per square meter. This decline is due to some projects that have been on sale for a long time and have not been able to close sales, leading to price reductions, or some projects lowering prices to align with the measures to reduce transfer and mortgage fees for properties priced below 3 million baht, which still have a market demand. This has resulted in some stock being cleared from the market.

Condominium prices may rise due to inflation.
Mr. Sanchai commented that for 2022, we believe that the condominium market is likely to gradually recover and become more vibrant as large developers plan to launch more projects, with an average of about 10,000 new units expected in the first quarter of 2022. However, there are still concerns regarding the outbreak of the Omicron variant of COVID-19. If there is a severe outbreak leading to a significant increase in deaths and serious cases, the government may have to issue orders to return to lockdown.

Another risk factor is inflation, which will affect the prices of consumer goods and construction materials, causing them to rise during a period of economic slowdown. Therefore, the trend of condominium selling prices may increase in 2022, and if projects are located in good areas, buyers will find it harder to negotiate prices. Nevertheless, the government has implemented measures to assist and stimulate purchasing power, such as extending the reduction of transfer and mortgage fees, which encourages real demand buyers, who remain the main purchasing power at this time.

The price range of condominiums that real demand groups are interested in is below 3 million baht, presenting a good opportunity for developers to create promotional pricing to align with the government's measures to reduce transfer and mortgage fees to clear remaining stock.

The market for houses priced at 10 million baht and above continues to show positive signals.
The low-rise housing market priced at 10 million baht and above remains strong, with developers increasingly focusing on low-rise projects throughout 2021. However, the overall supply in this segment is still limited, while demand continues to grow from high-income buyers. This segment of the real estate market is considered important for generating revenue for developers of low-rise housing projects in the past. Although the demand for these houses is somewhat limited, the New Normal lifestyle changes resulting from the COVID-19 pandemic have led to an increased desire to modify living spaces to be larger and more functional for daily use, as well as the development of technology for homes and the location of projects in easily accessible areas. These factors may lead to increased demand in this market segment in the future.

The number of land allocation permits for houses priced at 10 million baht and above (across all projects) shows that the allocation permits for houses priced at 10 million baht and above from 2017 to 2021 totaled 10,087 units, with 1,785 permits issued in 2021.

As of the end of 2021, there were approximately 197 projects for houses priced at 10 million baht and above still available for sale, with a total accumulated supply of 20,434 units and 14,766 units sold, resulting in a sales rate of 72%. The sales rate at the end of 2021 increased by 11% compared to the previous year's rate of 61%.

Throughout 2021, there were 3,100 new units sold, which is a relatively high number compared to the previous year, reflecting a positive growth trend in the market. This presents a good opportunity for developers in this real estate segment. Houses priced between 10-20 million baht have the highest demand at 8,043 units, followed by 21-30 million baht and 31-40 million baht with demand at 2,816 units and 2,102 units respectively. The highest sales rates are for houses priced over 100 million baht due to limited supply in this price range, resulting in the highest sales rate of 90%. Following that are houses priced between 51-60 million baht and 31-40 million baht, with sales rates of 83% and 82% respectively. The lowest demand and sales rates are for houses priced between 61-70 million baht.

The market for houses priced at 10 million baht and above in 2022 is expected to continue growing, targeting high-income customers. Supply is expected to increase due to the government's announcement of land and building tax rates without tax exemptions, prompting developers to plan to gradually develop land they have held. Additionally, competition in the market will increase, and the challenges for developers will be to develop projects at higher costs, including construction material prices, labor costs, pandemic-related expenses for employees, and the full 100% land tax costs.

The housing market will grow from Gen Y buyers.
The trend of home buyers is expected to increase as the age group of buyers is changing, specifically the 22-38 age group (Gen Y), which tends to focus more on self-employment than on salaried positions or even taking over family businesses. Research shows that townhouse and duplex home projects are beginning to receive positive responses from this age group, as this is a transitional age where they may want to expand or start families, or even use their homes as offices while living in them. Such house types have functions that align well with the lifestyle of these buyers. Furthermore, it is important for home designs to accommodate the future, incorporating technology for convenience in daily life and energy-saving technologies within homes. Some projects have already begun to implement these features, or designs that integrate with nature and are environmentally friendly, positively impacting quality of life. Future-ready designs, known as Sustainable designs, are becoming increasingly important to buyers as they represent a worthwhile investment in residential properties. However, developers should study consumer behavior to focus on target groups in each age range to adequately meet their lifestyle needs.

The supply of rental office space in Bangkok has grown to its highest level in 10 years.
Mr. Panya Jenkijwatanalert, Executive Director and Head of Office Space at Knight Frank Thailand Co., Ltd. provided information that the total supply of office space in Bangkok increased by approximately 148,000 square meters or 2.7% quarter-on-quarter, covering six new buildings expected to be completed within this quarter.

For the entire year of 2021, total supply increased by 280,000 square meters or 5.2%, reaching 5.66 million square meters, representing the highest growth rate in 10 years. There are approximately 1.7 million square meters still under construction from 2022 to 2026, averaging 340,000 square meters each year, with 66% of the total supply located in the CBD. In the next two years, the office market may undergo significant changes due to 25 new projects planned to be completed, adding approximately 850,000 square meters of rental space.

Leasing has improved significantly, with the take-up rate increasing from 45,000 square meters in Q3 to 116,000 square meters in Q4, driven by strong leasing of newly completed buildings. At the same time, a total of 70,400 square meters were returned, as the volume of leased space exceeded the amount returned. The leasing rate in Q4 was 45,500 square meters, marking the highest level since the onset of COVID-19.

Demand shows strong recovery signals, with the annual net leasing rate rebounding from a contraction of -121,000 square meters to an expansion of 24,800 square meters this year. This has resulted in total occupied space increasing by 0.5% to 4.62 million square meters. However, the market remains relatively sluggish compared to the pre-COVID-19 period, which had an average net leasing rate of approximately 96,000 square meters per year and total occupied space reaching a record high of 4.71 million square meters at the end of 2019.

The demand for new office space and newly renovated offices has been a strong driver in recent times, with 44% of total sales in 2021 coming from leasing new supply and newly renovated offices, marking the highest share of sales in the past 10 years.