bangkok condominium market report q2 2012

Q1 2012 - Q2 2012

new Supply

lAunCHeS

pRICeS

TAKe-up

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www.colliers.co.th

Bangkok Condominium MarketexeCuTIve SummARyNew launches in Q2 2012 were down by 30% from the previous quarter when launch numbers were boosted by the launch of projects delayed due to last year floods. More than 62% of the new units are located in the urban Bangkok area.

The number of condominium units under construction and scheduled to be completed in 2012 is the highest since the Asian Financial Crisis in 1997.

The take-up rate of newly launched units in Q2 2012 was only 42%, a decrease of around 34% from the first quarter, due to the many completed condominium units still being available in the market combined with buyers preferring to buy ready-to-move-in units.

Low to middle-income groups are still the main buyers; the affordable prices are not over THB3 million.

Developers still await the new Bangkok Town Plan, although the latest draft is more similar to the last Bangkok Town Plan of 2006 than was expected as many of the proposed restrictions on condominium in small sois have been removed.

New launches for Q2 2012 decreased by around 30% compared to Q1 2012 with approximately 9,900 units launched onto the market. This represents a continuation of consolidation in the market after the dramatic number of launches in Q1 2012, which was the

result of a number of projects being delayed in late 2011 due to the Bangkok floods.

The total number of newly launched units in the first half of 2012 is more than 24,000 or more than 6.5% over the same period in 2011.

Q2 2012 | Condominium

mARKeT IndICAToRS

newly lAunCHed CondomInIum unITS fRom Q1 2011 - Q2 2012 by QuARTeR

Source: Colliers International Thailand Research

BANgkok CoNDoMINIuM MARkeT RePoRT

In Q2 2012, approximately 62% of new condominium units in Bangkok were located in the urban Bangkok area. Within that area, the Northern Fringe showed the highest numbers with approximately 2,200 units or

22% of the total, followed by the outer City – West area with around 17%.

Around 11,440 new condominium units were completed and registered at the Department of Land in the first half of 2012. The total existing supply for the whole of Bangkok is approximately 335,300 units. More than 55,700 units are scheduled to be completed in H2 2012. The

number of condominium units under construction and scheduled to be completed in 2012 is the highest since the Asian Financial Crisis in 1997.

Source : Colliers International Thailand Research

Source: Department of Land, Colliers International Thailand ResearchNote: The number of units does not include projects from the National Housing Authority

newly lAunCHed CondomInIum unITS In Q2 2012 by loCATIon

CumulATIve Supply, 1994 - 2012

COLLIERS INTERNATIONAL | P. 2

Bangkok Condominium market rePort | Q2 2012

ToTAl Supply by loCATIon, AS of Q2 2012


Source: Department of Land, Colliers International Thailand Research

Approximately 62% or nearly 209,600 condominium units are located in Suburban Bangkok. Within the urban area, the Northern Fringe contains

the most number of units, followed by the City and Southern Fringe areas because of proximity to the centre and mass transit connections.


fuTuRe Supply – uRbAn bAngKoK

Approximately 55,700 units are scheduled to be completed in the second half of 2012. The Northern Fringe area continues as a main player in urban Bangkok with approximately 10,201 units planned for completion

in the second half of 2012. This is because many condominium projects were launched in this area during the past few years, especially along Ratchadapisek Road and on the sub-roads off Ratchadapisek Road.

Source: Colliers International Thailand ResearchRemark : Supply does not include units in Suburban Bangkok Area

CumulATIve fuTuRe Supply SCHeduled To be CompleTed fRom H2 2012 To 2014 by loCATIon In uRbAn bAngKoK, AS of Q2 2012



TAKe-up

The take-up rate for condominium projects in Bangkok for Q2 2012 was approximately 41%. The take-up rate in the outer City – West area is the

highest followed by the Suburban Bangkok and eastern Fringe area.


AveRAge TAKe-up RATe of newly lAunCHed unITS In Q2 2012 by loCATIon

Quality House Plc launched a new high-rise project opposite their low-rise project in the outer City – West area close to the new BTS Ratchaphruk Station on the new extension line from Wongwianyai Station and is scheduled to be completed in 2012. They sold nearly 80% of the 627 units after the official launch in May 2012, benefitting from the project’s proximity to the BTS station. Although it is still under construction, the completion of the station should be prior to the project’s completion.

lAunCHeS wITH HIgH TAKe-up RATeS In Q2 2012

AveRAge SellIng pRICeS of newly-lAunCHed pRojeCTS by loCATIon, Q2 2012


The average selling price in the City area is the highest at more than THB144,000 per sq m. This is more than 100% higher than the average price in Bangkok overall. The average selling price in the eastern Fringe area ranks second because of a new project by a listed company in the

area selling at an average price of more than THB95,000 per sq m. The average price in the Suburban Bangkok area is around 27% lower than the average price in this quarter as most are located outside the urban Bangkok area or far from mass transit.



other FaCtors


The average selling prices of projects not more than 200 m from BTS / MRT stations are 48 - 170% higher than projects farther away. Several luxury condominium projects and other projects from listed developers were launched in the second quarter of 2012 only a few metres from a

BTS station. There were some luxury condominium projects launched in Q2 2012 in the City area, close to a BTS station with the highest average prices in the quarter.

mASS TRAnSIT effeCT

AveRAge SellIng pRICeS of newly-lAunCHed pRojeCTS by pRoxImITy To exISTIng mASS TRAnSIT STATIonS, Q2 2012


The take-up rate of projects that are more than 1,000 m away from the BTS / MRT stations was the highest at around 46% due to the very low average selling price compared to other locations. In addition, the new

BTS extension lines are under construction and many condominium projects are scheduled to be completed at the same time or before the completion of the new extension lines.

TAKe-up RATe of newly-lAunCHed pRojeCTS by pRoxImITy To exISTIng mASS TRAnSIT STATIonS, Q2 2012



The growth rate of housing loans increased more than 3% between Q1 and Q4 2011 because of the first home incentive policy from the previous

government. Flood victims, too, need special mortgage loans for home renovations.

Approximately 14,300 condominium units were completed and registered at the Department of Land during the first half of 2012. After 2007, the number of condominium units increased significantly in the on Nut - Bearing area. The number increased with more than 3,800 units

launched in 2010 due to the start of construction of the BTS extension line in 2006 and the official opening in August 2011. A number of condominium projects were launched after 2006 and these are scheduled for completion before 2011.

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.


HouSIng loAnS foR peRSonAl ConSumpTIon exTended by fInAnCIAl InSTITuTIonS

CumulATIve CondomInIum unITS CompleTed by yeAR, on nuT – beARIng, 1995 – H1 2012

fInAnCIng

sPeCial issue

HISToRICAl Supply And newly-lAunCHed unITS Along THe new bTS exTenSIon lIne (on nuT – beARIng)




CumulATIve CondomInIum unITS lAunCHed, on nuT – beARIng, 2007 To H1 2012

Approximately 14,100 units were launched during 2007 to 2010. The highest number of launches on record was in 2010 with nearly 6,300 units. This was due to the new BTS extension lines taking shape and BMA announcing the official opening date, which attracted many developers to launch new condominium projects.

Many new condominium projects launched in the area were not located along Sukhumvit Road but were in small roads (sois) off Sukhumvit

Road. This is due to the increase in land prices along the mass transit lines. Most areas along the road are old residential communities with both sides of the main road lined with shop houses, a major obstacle to condominium development. Developers had to buy the land and shop houses or houses at high prices and this affected the selling price of their condominium projects. Some developers purchased plots of land on small streets off the main road and not far from the stations.



The condominium market in the second half of 2012 still shows continuing growth from the first six months, although the total number of condominium units launched in Q2 2012 was lower than the total number of newly launched units in Q1 2012. The reduction was because of the unusually high launch rate in Q1 as a result of projects delayed from 2011 due to the floods and partly because. However, the relatively high launch rate in Q2 came mainly from the listed developers announcing their plans for the rest of 2012 and demonstrating their continued confidence in the condominium market. There are also some new developers planning new projects for the second half of 2012.

Lower- to middle-income groups are still the main target market for developers who plan to launch new projects in the area outside mass transit lines or not far from the new mass transit extension stations. There are some listed developers still focusing on high net worth clients by scheduling the launch of new luxury condominium projects in the second half of 2012. Some listed developers are also focusing more on foreign buyers by arranging events or road shows in Singapore, Hong kong and other countries in the region to promote direct sale of their projects.

The most up-to-date draft of the new Bangkok Town Plan is more similar to the last Town Plan in 2006 than was expected. The current draft has removed earlier proposed prohibitions on condominium in small sois in residential zones, though has kept the restriction in commercial zones. Developers continue to monitor the situation. Some have postponed looking for new plots of lands in the City area until the official announcement from the government is released. others applied for construction permits for their land before the official announcement.

Thailand is located in the centre of Asia Pacific and has great potential for AeC in 2015. Many foreign developers are entering Thailand by themselves or looking for joint ventures with Thai developers to start their first projects in the country.

Many developers are focusing more on precast system because of the decrease in the labour force, the increase in minimum wage to THB300 per day in Bangkok and the opening of Myanmar. This has also caused the completion dates for some projects to be postponed.

foReCAST



AppendIx



ZonIng

HISToRICAl Supply by yeAR

CumulATIve Supply In bAngKoK



• CITY AREAThe area covers four adjacent but competing sub-markets: the Sukhumvit 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, Chitlom Road, Ratchadamri Road, Witthayu Road and Rachaprasong Road; the Silom / Sathorn section; and the Riverside section fronting the Chao Phraya River along Charoenkrung Road and Charoennakorn Road, where several five-star hotels are located. The City area is convenient for businesspersons, expatriates and tourists, because of its proximity to many office buildings, retailing and local attractions. • CITY FRINGE AREAThis area covers three parts of Bangkok:

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 station to Bangsue station to the north. Southern fringe:

This section covers Narathiwad Ratchanakarin Road, Chan Road, Sathupradit Road, Charoenkrung Road and Rama III Road along the Chao Phraya River. eastern fringe:

This section covers the BTS route starting from Thong Lor Station to on Nut Station to the east, Rama IV Road and Petchaburi Road.

This area covers locations with their own local infrastructure and convenient transportation. However, commuting is required to have access to the central business and entertainment areas.

• OUTER CITY AREAThe area covers two parts of Bangkok:

outer City (east):

This section starts from the extension of the BTS route at on Nut Station to the Bangkok boundary to the east. outer City (west):

This section starts from the extension of the BTS route at Taksin Station to Bang Wa station, which includes the area from krung Thonburi Road to Ratchaphruek Road near Petchakasem intersection.

• SUBURBAN BANGKOKThese are the environs outside the areas already mentioned. expansion of the mass transit system is the main determinant for increasing future supply in a particular area. The expansion from on Nut to Samut Prakarn is scheduled to be completed in 2011. The expansion of the BTS will benefit directly the surrounding condominiums, as it will considerably reduce transportation costs and time. This will encourage the development of new condominiums in this area. Suburban Bangkok represents the biggest area and for the purposes of this report and includes Bangkok city’s old town (koh Rattanakosin area and boundary area). This location has comprehensive town planning controls restricting building height, so there are no condominium projects in the area.



www.colliers.co.th

CollIeRS InTeRnATIonAl THAIlAnd mAnAgemenT TeAm PRoJeCT SALeS & MARkeTINgMonchai orawongpaisan | Associate Director ReSIDeNTIAL SALeS & LeASINgNapaswan Chotephard | Manager ReSeARCHTony Picon | Associate Director Surachet kongcheep | Senior Manager

oFFICe & INDuSTRIAL SeRVICeSNarumon Rodsiravoraphat | Associate Director ReTAIL SeRVICeSAsharawan Wachananont | Associate Director ADVISoRY SeRVICeS | HoSPITALITY Jean Marc garret | Director ADVISoRY SeRVICeSNapatr Tienchutima | Associate Director

ReAL eSTATe MANAgeMeNT SeRVICeSPrasert Saiphrawan | Senior Manager

INVeSTMeNT SeRVICeSNukarn Suwatikul | Associate Director Wasan Rattanakijjanukul | Senior Manager

VALuATIoN & ADVISoRY SeRVICeSPhachsanun Phormthananunta | Director Wanida Suksuwan | Associate Director PATTAYA oFFICeMark Bowling | Senior Sales ManagerSupannee Starojitski | Senior Business Development Manager / office Manager

HuA HIN oFFICeSunchai kooakachai | Senior Manager

ReSeARCHeR:

ThailandSurachet kongcheepSenior Manager | ResearchemAIl [email protected]

This report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.

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bangkok condominium market report q2 2012

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