Mr. Nattha Kahapana, Deputy Managing Director and Head of Phuket Operation, Knight Frank Thailand, said that resale condominiums are considered a good indicator of pricing in the condominium market, reflecting the state of the market at any given time period and amid any situation. There are different factors in play, such as location, condition of the project, project developer’s brand, lifestyle of residents, juristic person administration, and rental returns. For condominiums that are completed and ready for occupancy, the transactions that take place reflect real demand and supply in the local market. As such, the selling prices aptly represent the needs of buyers and sellers.
From a September 2021 survey among a sample group of resale condos located no more than 300 metres from a Sky Train station and from projects not older than 3 years with over 50 percent of the units sold, it was found that, in some cases, the asking prices in the resale market are higher than the initial prices offered by the developer. Most of these units are located near the Blue Line of the Sky Train, around Ratchadaphisek Station; the resale asking price is 162,000 baht per sq m., an upside of 22 percent. In the vicinity of Bang Phlat Station, resale condos have asking prices ranging from 87,000 to 120,000 baht per sq m., representing an upside of 10 to 22 percent. Around Sam Yan Station, despite the fact that they are leasehold condominiums, there is also an upside of 8 percent, with an asking price of 149,000 baht per sq m. The Charan 13 Station area has a resale price of 130,000 baht per sq m., with an upside of 19 percent.
The end of the Green Line at Pu Chao Saming Prai Station has resale condominium prices of 90,000 baht per sq m., which marks an upside of 14 percent. Around the Yellow Line at Thiphawan Station, the resale asking price is 111,000 baht per sq m., an upside of 16 percent. The pre-sale prices of projects in these locations are not high compared to the Green Line locations in the Sukhumvit area. Also, a portion of the units were sold through promotions intended to speed up sales and help developers maintain their cash flow during the Covid-19 crisis, which is reflected in the resale market’s moderate price upside. Additionally, many resale units tend to be quite well positioned within the projects. They have more selling points than other units in the same project as the customers who snap them up during the early sales stages tend to have the option to choose a good location first, for example. As for super luxury condos priced at 300,000 baht per sq m. and up, the upside has been quite limited. However, their target group of buyers are in a very niche market, so if there are products and services that cater to the needs of this group, it is believed that there would still be demand. This group possesses financial stability and has not been affected by the Covid-19 crisis.
Resale Condo Ownership Transfers in Q2 2021 Recovered to Pre-Crisis Levels in Terms of Value Ownership transfers of condominiums in Bangkok and its vicinity among ordinary persons in 2019, before the Covid-19 crisis, amounted to 11.136 to 12.210 billion baht in value. During Q2 In 2020, the transfer value decreased to 7.576 billion baht; it then gradually increased until Q2 2021, to 11.359 billion baht, which is at the same level as during the pre-epidemic period. In terms of the number of unit transfers, it is still recovering but has surpassed its lowest point in Q2 2020. This recovery in transfer value shows that the middle to upper segment of the condominium resale market is likely to recover. Meanwhile, condos in the lower priced segment is showing a slower recovery due to weak purchasing power as well as commercial banks tightening their lending terms amidst high NPL and SML levels, despite any positive outlooks.
Condominium market was more balanced from 2020 to June 2021, with 23 new projects that sold well with pre–sales of over 80 percent.
Before the Covid-19 epidemic, the condo market was in an uptrend. The average new supply increase was 56,000 units per year, while demand increased by an average of 52,000 units per year as the supply continued to increase. This caused excess supply that required longer sales periods and oversupply concerns arose. In 2020, the launches of new projects slowed considerably due to concerns surrounding the Covid-19 epidemic. As a result, new project launches dropped by 60 percent to about 22,000 units – a dramatic shift from the past, which boasted an average of 56,000 new units launched per year amidst fairly stable demand. In the first half of 2021, developers offered promotions with significantly reduced prices so demand has been at 50,000 units per year, bringing demand and supply in the condo market back to a more balanced state. A survey conducted by the Research and Project Development Consultancy of Knight Frank Chartered (Thailand) Co., Ltd. found that, since 2020, there have been 23 newly launched condominium projects with 6,316 units that achieved pre-sales levels higher than 80 percent. This implies that confidence in the market has increased, and it is on a path of recovery once mass vaccinations and virus controls are in place.
