Condo market showing more signs of cooling off

Condo market showing more signs of cooling off

New condominium supply in Greater Bangkok continued declining with an estimated decrease of around 10% this year, while new low-rise units are increasing, expected to equal the peak seen in 2005.

New land allotment permits for low-rise units excluding vacant land plots in Greater Bangkok totalled 27,400 units in the first half of the year, up from around 19,800 in the same period last year.
Last year, low-rise permits totalled about 51,400 units, up from about 42,600 units in 2009. During the past seven years, the peak was in 2005 with 54,100 units, up from 50,600 units in 2004 but down in 2006 to around 31,300 units.
Meanwhile, the number of new high-rise housing construction permits in Greater Bangkok in the first quarter dropped to 260 buildings containing 1.51 million square metres from 302 buildings with 1.59 million sq m in the fourth quarter of 2010.
The first quarter of last year saw 268 buildings with 1.64 million sq m, and this segment has been declining every year since 2007. Last year there were 1,068 buildings with 6.07 million sq m, down from 1,287 buildings with 7.64 million sq m in 2009.
"The condominium sector has cooled since last year due to oversupply," said Samma Kitsin, director-general of the Real Estate Information Center (REIC).
This year he estimated new condo units launched in Greater Bangkok would total 60,000, down from 66,000 last year.
The REIC reported newly registered housing units in the first half totalled 39,411, down 19% from the same period last year due to the expiration of property incentives in June 2010.
In Bangkok, the number fell only 5% year-on-year to 25,354 units, but in five neighbouring provinces it dropped 36% to 14,057 units.
Of the total in Greater Bangkok, 15,803 units were condominiums, down 39%. Townhouses dropped 23% to 5,119 units, but single houses rose 8% to 15,967 units.
Surprisingly, newly registered single houses exceeded condominiums by 1% in the first half.
"Single houses represented 41% in the first half while condos were 40%, a shift from 30% and 54% in 2010 and again illustrating the condo cool-down," said Mr Samma.