Bangkok condominium market heavily oversupplied, but unlikely to come crashing down soon
Developers admit supply has risen sharply; see a drop in operating margins
By Kanana Katharangsiporn
Drive past the Sukhumvit-Asoke intersection in Bangkok and you may have noticed a new hoarding has come up in the past few days advertising a special discount for buyers of a high-end condominium project on Sathon Road that until recently was being touted as having been 100 per cent sold out.
This is not a stand-alone case. If you dig deeper you will find that the demand for property in Thailand, especially in the capital Bangkok, has slowed down over the past couple of years, although most developers will not admit to it.
“The situation in the property market is not as rosy as you may think but it is not that bad either,” said Adisorn Thananan-narapool, CEO of Land & Houses, which has a market capitalisation of 132 billion baht (US$4.2 billion).
Although he admitted that the supply of condominiums in the city had risen sharply, which could impact the take-up rates, Adisorn said that at the moment fears of a property market crash was still not on the horizon.
Chanond Ruangkritya, president and CEO of SET-listed Ananda Development, whose portfolio focuses mainly on the condominium market catering to the middle to the upper end, said that he does not see a situation of a demand/supply mismatch but expects developers to put more emphasis on the location and buyers’ profile when launching future projects.