Bangkok residential market unsold rate rises to 5% in Q3 | Real Estate Asia
, Thailand
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Bangkok residential market unsold rate rises to 5% in Q3

This is equivalent to 3,573 units.

Those seeking a large unit for their own stay, a small functional unit for a second home, or a cheap buy-to-let unit contribute to the bulk of current demand for Bangkok condominiums, according to a JLL report. 

Despite demand being fragmented, real demand has consistently driven the market over the past few years. In 3Q22, the market unsold rate increased to 5.0%, which translates to 3,573 unsold units.

Here’s more from JLL:

Since Thailand’s reopening, multinational corporations (MNCs) have sent new expatriates, hailing largely from Europe, the USA, Korea, Singapore, and Hong Kong, to fill vacant positions. However, many have been looking to cut back on housing costs, preferring more flexible lease terms.

Slower increase in condominium supply

In 3Q22, several prime condominiums were completed in the nearby Sukhumvit area (Thonglor-Ekkamai). After the completion of Park Origin Thonglor and Hampton Thonglor, Origin Property announced its second phase, consisting of Origin Prestige Thonglor and Origin Courtyard Thonglor.

As of 3Q22, the number of luxury condominiums in Bangkok has increased to around 68,100. Due to limited launches in recent years, the growth of the condominium stock market will likely decelerate in the short and medium term. In contrast, the apartment market has increased to around 4,700 units due to refurbished units that are ready for rent.

Inflation is reflected in rising prices

The average rent continued to increase by 1.0% y-o-y to THB 561 per sqm per month as a result of many landlords increasing their asking rent. Due to the limited supply in Central Bangkok, the monthly rental rate grew faster even compared to other highly competitive areas.

Condominium capital values recorded a slight increase of 0.2% q-o-q or 3.9% y-o-y. In addition, the overall economic sentiment appears to be improving slightly. Buyers have been more at ease as the impact of global events felt locally has been minimal, despite purchasing power remaining low.

Outlook: Marketing and sales efforts likely to pick up speed soon

In the next twelve months, a total of around 1,600 units are scheduled to complete across eight projects. Cocoparc, one of the nearly-completed projects, will be releasing a large number of unoccupied units into the market due to years of paused sales. Hence, a 6.5% unsold rate is expected by the end of 2022.

Due to increased development costs, which included raw material and labour, the selling price of existing stock and future supply may increase. Investment yield is predicted to decline over the long term.

 

Note: Bangkok Residential refers to Bangkok's high-end and luxury residential market.

 

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