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Bangkok's condo market could be slowing down
Jul 27, 2012
The area around Ratchadaphisek Road remains in high demand with developers
It was reported by the Bangkok Post today that property consultant Colliers International Thailand has voiced that the condominium market in Bangkok is showing signs of slowing down in the short term. Senior manager of Colliers’ research department, Surachet Kongcheep, said that there has been a decrease in the number of condominium units launched in the second quarter compared to the first quarter by about 30 percent, with only 9,920 units launched in Q2.
Of the new units launched in Q2, almost 2,200, around 22 percent, were located in the northern fringe area of the city, proving the area to still be highest in demand. Mr Surachet puts this down to the availability of land plots in the area, in particular, along the small roads that connect with Ratchadaphisek Road. Furthermore, the popularity of the area could be partially down to its ease of access to mass transit stations, a feature which can be seen to be of growing importance when one considers that more than 70 percent of the newly launched units in Q1 of 2012 were about one kilometre away from mass transit lines.
"These areas were the most interesting for developers and buyers. Many condominium projects were launched in these areas during the past two years along the mass transit lines.
"Only 515 units, or 5 percent, were located no more than 200 metres away from BTS or MRT stations,” said Mr Surachet.
The latest draft of a new Bangkok city plan will allow buildings to be taller than 23m and cover 10,000 sq m based on limitations of floor to area ratio (FAR). Consequently, it is expected that land prices within a 600 m radius of the mass transit stations will rise. Mr Surachet explained that if the Department of City Planning implements the changes in the latest draft, then the rise in land prices will cause a subsequent rise in the average selling price of condominiums in those area. He went on to explain that these price changes may become too high for small developers, especially along the mass transit line and thus, larger big-name developers would gain a majority stake of condominiums in the city area.