New launches in Q1 2011 fell to a more sustainable level following the frenetic previous six months. Concerns of an overheating property market have been allayed as a result. The condominium market has begun the process of consolidation. Within urban Bangkok, the Northern and Southern fringes led the way in new launches with around 15% each for the total of the whole of Bangkok. The Suburban area accounted for around 56% of the total. Around 3,500 units were supplied in Q1 2011, a slight decrease q/q. For the past two years, quarterly additions to new supply have been remarkably stable. The earthquake in Chiang Mai in March 2011 caused many potential buyers to pay attention to the resilience of buildings to damage from such events. More may be required to address these concerns although Bangkok is far from areas prone to serious seismic activity.
Q1 2011 | Condominium THAIlAnd Bangkok Condominium market rePort Bangkok Condominium Market exeCuTIve SummARy new launches in Q1 2011 fell to a more sustainable level following the frenetic previous six months. Concerns of an overheating property market have been allayed as a result. the condominium market has begun the process of consolidation. Within urban Bangkok, the northern and Southern fringes led the way in new launches with around 15% each for the total of the whole of Bangkok. the Suburban area accounted for around 56% of the total. mARKeT IndICAToRS around 3,500 units were supplied in Q1 2011, a slight decrease q/q. For the past two years, Q4 2010 - Q1 2011 quarterly additions to new supply have been remarkably stable. new Supply the earthquake in Chiang mai in march 2011 caused many potential buyers to pay attention to the lAunCHeS resilience of buildings to damage from such events. more may be required to address these concerns although Bangkok is far from areas prone to serious seismic activity. pRICeS TAKe-up newly lAunCHed CondomInIum unITS duRIng THe yeAR 2010 – Q1 2011 by QuARTeR Source: Colliers international thailand research new launches for Q1 2011 were down compared with the previous quarter by around 46%. Just under 10,800 units were launched in Q1 compared to around 20,000 in Q4 2010. at the end of last year, there were worries that the market was beginning to overheat with the substantial number of new units being launched. the Bank of thailand sought to cool the market with a regulation limiting the maximum loan to value (LtV) to 90% for condominiums priced below 10 million baht. this, coupled with small increases in interest rates, has had the effect of cooling the market. www.colliers.co.th Bangkok Condominium market rePort | Q1 2011 newly lAunCHed CondomInIum unITS In Q1 2011 by loCATIon Source : Colliers international thailand research in Q1 2011, the Suburban Bangkok area trumped urban Bangkok with the of each location from the total. the City area was third, with 600 units. higher number of units launched. many projects in the Suburban Bangkok the Southern Fringe area number was on the back of one large-scale area contain over 600 units. project, the trust ratchada rama 3. Within urban Bangkok, the northern Fringe and Southern Fringe areas have shown the highest numbers with approximately 1,600 units or 15% AddITIonAl Supply by QuARTeR Source: department of Land, Colliers international thailand research remark: the number of units does not include projects from the national Housing authority approximately 3,500 new condominium units were completed and 39,500 units are scheduled to be completed in 2011. the number of registered at the department of Land in Q1 2011 and the total number of condominium units under construction and scheduled to be completed in the whole of Bangkok was approximately 300,000 units, and more than 2011 is the highest since the global financial crisis in 1997. COLLIERS INTERNATIONAL | P. 2 Bangkok Condominium market rePort | Q1 2011 ToTAl HISToRICAl Supply by loCATIon To 1Q 2011 Source: department of Land, Colliers international thailand research more than 195,000 condominium units, around 65% of the total, are compared to the City area. the outer City areas are appearing on the located in the Suburban Bangkok area. Within the urban Bangkok area, radar screen due to the extension of the BtS across the Chao Phra Ya the northern Fringe contains the most units due to its proximity to the river and along Sukhumvit road and this is set to continue. city centre, mass transit connections and relatively lower land prices fuTuRe Supply – uRbAn bAngKoK CumulATIve fuTuRe Supply SCHeduled To be CompleTed duRIng 2011 – 2013 by loCATIon In uRbAn bAngKoK (AS of Q1 2011) Source: Colliers international thailand research remark: Supply does not included units in Suburban Bangkok approximately 21,150 units are scheduled to be completed during the 2011, followed by the City area with around 6,200 units. it is expected rest of 2011. the northern Fringe area continues to be the main player that the northern Fringe will continue to dominate supply for the early in urban Bangkok, with nearly 8,500 units scheduled to be completed in part of the decade in urban Bangkok. COLLIERS INTERNATIONAL | P. 3 Bangkok Condominium market rePort | Q1 2011 TAKe-up AveRAge SAleS pRopoRTIon of newly lAunCHed unITS In Q1 2011 by loCATIon Source: Colliers international thailand research the occupancy rate in the Suburban Bangkok area was the highest, project from Sansiri. the on nut-Bearing extension line is close to the followed by the eastern Fringe and outer City - east areas. the positive date of the official opening in august 2011 and this spurred take-up in the figures for the eastern Fringe are the result of a popular newly launched outer City - east area. lAunCHeS wITH HIgH TAKe up RATeS In Q1 2011 LPn returned to the number one spot in the condominium market in the project by LPn is Lumpini Condotown nida – Serithai, located on Serithai first quarter of 2011 with three projects in two locations, although both road, with a total unit of 593 units and one of the highest take-up rates. locations are in Suburban Bangkok. LPn launched two projects at the as a result LPn launched a new project, Lumpini Condotown nida – same time. Lumpini Ville Lasal – Barring on Sukhumvit 105 road has Serithai 2 opposite the first project with 750 units. the new project also 1,028 units and showed the highest take-up rate of almost 100%. another has a high take-up rate. COLLIERS INTERNATIONAL | P. 4 Bangkok Condominium market rePort | Q1 2011 u – delight 2 @ Bangsue Station by grand u Living Co., Ltd. is located Station with a total of 645 units in the Suburban Bangkok area and had on Prachachuen road in the same location of u – delight @ Bangsue a high take-up rate of more than 80% shortly after the initial launch. AveRAge SellIng pRICeS of newly lAunCHed pRojeCTS by loCATIon, Q1 2011 Source : Colliers international thailand research the average selling price in the City area is the highest at more than tHB launched in Q1 2011. the average selling price in the northern Fringe 95,000 per sq m, however this is nearly 13% lower than the average and eastern Fringe areas are similar due to the land price and the similar selling price in 2010. this was due to less prestigious projects being mass transit system provided in the area. COLLIERS INTERNATIONAL | P. 5 Bangkok Condominium market rePort | Q1 2011 mASS TRAnSIT effeCT TAKe-up RATe of newly lAunCHed pRojeCTS by pRoxImITy To exISTIng mASS TRAnSIT lIneS, Q1 2011 Source: Colliers international thailand research the take-up rate of projects more than 1,000 metres from the BtS / because although the projects are close to the BtS / mrt lines, the mrt systems was the highest, at around 50%. Projects less than 200 selling price was often higher than other areas. metres from the mass transit system had the lowest take-up rate, AveRAge SellIng pRICeS of newly lAunCHed pRojeCTS by pRoxImITy To exISTIng mASS TRAnSIT lIneS, Q1 2011 Source: Colliers international thailand research the average selling price of projects not more than 200 metres from take-up rate. BtS / mrt lines was higher by 55% - 134%, which directly affected COLLIERS INTERNATIONAL | P. 6 Bangkok Condominium market rePort | Q1 2011 fInAnCIng HouSIng loAnS foR peRSonAl ConSumpTIon exTended by fInAnCIAl InSTITuTIonS Source: Bank of thailand and Colliers international thailand research note: excludes negligible amounts of financing from other sources. Percentage change is comparable quarter-on-quarter. the growth rate of housing loans increased more than 3% in Q3 2009 housing loans in that period compared to other periods. the amount of – Q1 2010 because the government’s incentives attracted buyers to loans in 4Q 2010 increased more than 2%, due to the new loan-to-value purchase and transfer by the second quarter of 2010. this boosted limits from the Bank of thailand that took effect on January 1, 2011. COLLIERS INTERNATIONAL | P. 7 Bangkok Condominium market rePort | Q1 2011 SwoT AnAlySIS STRengTHS Bangkok is the capital city of thailand and a centre of work and education, so many people from other parts of thailand move to live in Bangkok. the market is dominated by large, listed developers with a strong First time buyers still remain a potent force in the market especially in reputation and a focus on the bottom line. this means greater economies the lower end of the market. of scale, improved financing options and projects that are relevant to market conditions. However smaller players can still successfully enter demographics also point to a growing number of plus 50-year-old the market and add a certain innovation and creativity to the mix. buyers who may be seeking to upgrade to better quality units in good locations due to increased spending power and extra capital from Highly popular condominium and housing exhibitions as well as frequent inheritance. coverage on the housing market from the press help to keep the topic in the front of potential buyers’ minds and help stimulate further demand. in the longer term, the integration of aSean over the decade could lead to more wealthy individuals from those countries purchasing higher end developers are targeting different income segments and demographics units in Bangkok where they are likely to operate from. this could with increasingly sophisticated branding which enlivens the buying generate demand in the latter half of the 2010’s. Further interest could experience. greater efforts have been made in producing quality be seen from personal investors from india and China. showrooms that provide buyers with a better insight into the products they are interested in buying. THReATS weAKneSSeS the earthquake in myanmar in march 2011 was not far from the northern border of thailand and it affected some high-rise buildings in Bangkok. Some condominium projects in Bangkok were starting to be sold prior to the day after the disaster, many people were worried about the security eia (environmental impact assessment) approval, therefore many of high-rise buildings in Bangkok and this directly affected the confidence projects are forced to change the design and floor plan, reduce the of people interested to buy a condominium unit. although many number of floors or units in order to comply or even be cancelled developers announced that their own projects were safe, some buyers altogether, although they may have sold out already. eia approval is one still postponed their decision. although some form of earthquake of the main concerns for buyers and many developers are now advertising protection has been included in construction permits for the past few eia approval in their signage and advertising literature. years, no exact criteria has been established and it is unknown to what extent building can withstand a magnitude 5.0 earthquake measurement oppoRTunITIeS of intensity. However, Bangkok is not located on an earthquake prone the condominium market in Bangkok has room to grow, especially along area and are currently built to withstand wind force. the new BtS extension lines that are not too far from the city. eventually the further the lines are from the city the more likely landed property will Commodity prices are causing inflation to creep up and along with be the mainstay of new residential developments due to cheaper land economic growth, further pressures to raise interest rates could cool the prices. market even more further into the future. COLLIERS INTERNATIONAL | P. 8 Bangkok Condominium market rePort | Q1 2011 AppendIx COLLIERS INTERNATIONAL | P. 9 Bangkok Condominium market rePort | Q1 2011 ZonIng HISToRICAl Supply by yeAR CumulATIve Supply In bAngKoK COLLIERS INTERNATIONAL | P. 10 Bangkok Condominium market rePort | Q1 2011 • CITY AREA this area covers locations with their own local infrastructure and convenient transportation. However, commuting is required to have the area covers four adjacent but competing sub-markets: the Sukhumvit access to the central business and entertainment areas. section comprising Sukhumvit road between Soi 1 and Soi 55 to the north and Soi 2 and Soi 38 to the south; the Central Lumpini section including Phloen Chit road, rama i road, Soi Langsuan, Soi Sarasin, • OUTER CITY AREA Chitlom road, ratchadamri road, Witthayu road and rachaprasong the area covers two parts of Bangkok: road; the Silom / Sathorn section; and the riverside section fronting the Chao Phraya river along Charoenkrung road and Charoennakorn road, outer City (east): where several five-star hotels are located. the City area is convenient this section starts from the extension of the BtS route at on nut Station for businessmen, expatriates and tourists, because of its proximity to to the Bangkok boundary to the east. many office buildings, retailing and local attractions. outer City (west): • CITY FRINGE AREA this section starts from the extension of the BtS route at taksin Station this area covers three parts of Bangkok: to Bang Wa station, which includes the area from krung thonburi road to ratchaphruek road near Petchakasem intersection. northern fringe: this section covers the BtS route starting from ratchathewi Station to mo Chit Station to the north and the mrt route starting from Petchaburi • SUBURBAN BANGKOK station to Bangsue station to the north. these are the environs outside the areas already mentioned. expansion of the mass transit system is the main determinant for increasing future Southern fringe: supply in a particular area. the expansion from on nut to Samut Prakarn this section covers narathiwad ratchanakarin road, Chan road, is scheduled to be completed in 2011. the expansion of the BtS will Sathupradit road, Charoenkrung road and rama iii road along the Chao benefit directly the surrounding condominiums, as it will considerably Phraya river. reduce transportation costs and time. this will encourage the development of new condominiums in this area. Suburban Bangkok represents the eastern fringe: biggest area and for the purposes of this report and includes Bangkok city’s old town (koh rattanakosin area and boundary area). this location this section covers the BtS route starting from thong Lor Station to on has comprehensive town planning controls restricting building height, so nut Station to the east, rama iV road and Petchaburi road, there are no condominium projects in the area. COLLIERS INTERNATIONAL | P. 11 Bangkok Condominium market rePort | Q1 2011 CollIeRS InTeRnATIonAl THAIlAnd mAnAgemenT TeAm 480 offices in 61 countries on 6 continents ProJeCt SaLeS & marketing united States: 135 • the third largest commercial monchai orawongpaisan | Senior manager real estate services company in Canada: 39 the world Latin america: 17 reSidentiaL SaLeS & LeaSing • the second most recognised asia Pacific: 194 napaswan Chotephard | negotiator commercial real estate brand emea: 95 globally oFFiCe & induStriaL SerViCeS • uS$2 billion in annual revenue narumon rodsiravoraphat | Senior manager • over 2 billion square feet under management retaiL SerViCeS • over 15,000 professionals asharawan Wachananont | Senior manager adViSorY SerViCeS napatr tienchutima | associate director reaL eState management SerViCeS CoLLierS internationaL thaiLand: Bandid Chayintu | associate director Bangkok office 17/F Ploenchit Center, adViSorY SerViCeS | HoSPitaLitY 2 Sukhumvit road, klongtoey, Jean marc garret | director Bangkok 10110 thailand Tel +662 656 7000 inVeStment SerViCeS fAx +662 656 7111 nukarn Suwatikul | associate director emAIl email@example.com Wasan rattanakijjanukul | Senior manager Pattaya office 519/4-5, Pattaya Second road (opposite Central Festival reSearCH Pattaya Beach), nongprue, Banglamung, Chonburi 20150 antony Picon | associate director Tel +6638 427 771 Surachet kongcheep | Senior manager fAx +6638 427 772 emAIl firstname.lastname@example.org VaLuation & adViSorY SerViCeS nicholas Brown | associate director Phachsanun Phormthananunta | associate director Santipong kreemaha | Senior manager Wanida Suksuwan | manager PattaYa oFFiCe mark Bowling | Senior Sales manager Supannee Starojitski | Senior Business development ReSeARCHeR: ReSeARCHeR: manager / office manager thailand thailand antony Picon Surachet kongcheep associate director | research Senior manager | research emAIl email@example.com emAIl firstname.lastname@example.org this report and other research materials may be found on our website at www.colliers.co.th. 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