Labor shortage and choosier consumers could pose problems for developers, according to today’s report by Andrew Batt in DD Property:
Bangkok’s condominium market is not immune from further problems, according to the latest research from real estate firm Colliers International.
In its Thailand Research Research & Forecast Report, the firm noted it expects that more than 6,000 units are scheduled to be completed in Bangkok during the last quarter of 2014, but less than 20 percent will be completed on time.
This, Colliers said, is due to delayed construction progress mainly from lack of workers. In addition, the lower take-up rate also affected the construction progress, especially with small developers who have limited budgets and were waiting for project financing from financial institutions.
The firm also reported how many buyers are looking for second-hand condominium units because the prices are lower or similar to new units, but in the same locations.
New launches in 3Q 2014 decreased by 8 percent from the previous quarter after some condominium projects could not achieve their targets, and other developers decided to postpone their new projects until 2015.
The average take-up rate for newly launched condominium projects in Bangkok for 3Q 2014 was approximately 59 percent, a slight decrease from the previous quarter, but this may increase by between 5 and 10 percent in the last quarter, according to Colliers.
Most new condominium projects launched in 3Q 2014 were in July and August, while the condominium market in September slowed after demand failed recover, demonstrated by the lower than expected take-up rates of some condominium projects.
That said, some condominium projects from listed developers sold out or had a high take-up rate within a few days of the official launch.
Colliers also reported that the average price of new condominium units launched in 3Q 2014 was approximately THB91,600 psm – continuing to increase from 1Q and 2Q 2014. The average selling price of newly launched projects in the city area is the highest at more than THB160,000 psm, with many high price condominium projects were launched in the third quarter.
The average price of new condominium units launched in the Bangkok suburbs in 3Q 2014 was approximately THB75,000 psm, an increase of around 20 percent from the prior quarter.
Colliers noted that many property buyers are looking for second-hand condominium units as the prices of newly launched units are gradually increasing every quarter, because the prices are lower or similar to new units, but in the same location.
The average price of all new condominium units launched in 2Q and 3Q of 2014 gradually increased each quarter. This shows that the condominium market is growing slightly after the market slowdown from 4Q 2013 to 2Q 2014.
Colliers predicted that the average price of completed condominium units will probably increase more than between 3 and 5 percent in the last quarter of 2014, and also in 2015. A more than 10 percent increase is expected for new condominium units that are scheduled to be launched in 4Q 2014.
Photo: Coconuts Bangkok
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