Brace for Bangkok condo market slowdown: analyst

The scales are tipping toward oversupply as market observers await equilibrium

Sunset scene of modern office buildings and condominiums around Lumpini Park, Bangkok. Travel man/Shutterstock

The condominium market in Bangkok is set to decelerate this year although opportunities in certain locations remain, a leading analyst told Bloomberg.

“We believe the market is entering an equilibrium stage where prices will be adjusted to a more realistic level,” Aliwassa Pathnadabutr, a managing director of CBRE Thailand, said.

Her prognostications come as Thailand implements macro-prudential regulations designed to curb search-for-yield behavior in the property market. At this junction, opportunities may emerge for property seekers and investors as developers look to clear excess stock at low prices.

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A total of 454,814 residential units across the country were unsold in 2018, Bloomberg reported, citing data from Sopon Pornchokchai, president of the Agency for Real Estate Affairs Co. The properties had a combined value of USD41 billion.

In Bangkok alone, developers are reporting take-up rates of 55 percent while average asking prices are decreasing six percent year-on-year, a Knight Frank report showed via Bloomberg. However, 65,000 apartments were added to the Thai capital last year, the biggest influx of supply since 2009 and 11 percent bigger than 2017.

But “ask anyone who’s been in property how many times they’ve heard the bubble will burst?,” Frank Khan, Knight Frank Thailand’s head of residential, told Bloomberg. “I’ve heard this more than 10 times, but in my last 15 years, it’s never burst.”