MARKETVIEW

Bangkok Residential, Q3 2017

Market stabilizes with anticipated

economic recovery
Existing Supply Downtown Sales Asking Price (THB/SQ.M.)
(Downtown) Rate (3-years) (Downtown)
+6.9% y-o-y 91.9% 2014 – Q3 2017 +11.6% y-o-y

The overall condominium market in Q3 Figure 1: Newly Completed Bangkok Condominiums

2017 remained generally slow; however,
No. of Units Midtown/Suburban Downtown
the downtown area performed well due
80,000
to healthy demand while the
70,000
midtown/suburban market still faced 60,000
challenges . 50,000
40,000
30,000
A total of 4,017 units were launched in
20,000
the downtown area compared to 1,041 10,000
units launched last quarter 0
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017F
2019F
2021F
significantly increasing by 53% Y-o-Y.
However, the total number of newly
launched units in 2017, as of Q3 2017, Source: CBRE Research, Q3 2017
was 7,870, close to the 8,154 units
launched in the whole of 2016 and we
do not expect a large number of new Figure 2: Average Asking Prices of Future Units in
launches in the last quarter of this Downtown (High-End and above)
year. Riverside Silom/Sath
THB/SQ.M. orn
Central Lumpini Sukhumvit
350,000
Buyers in the downtown market 323,333
300,000
288,333
remained selective and cautious which
250,000 256,710
slowed down the overall sales rate 222,500
200,000
resulting in a mixed sales performance.
150,000
Only projects that are in good or new
100,000
locations with the right pricing that
matched the demand in the area did 50,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 2017
Q2 2017
Q3 2017

better than the average.

Source: CBRE Research, Q3 2017

Q3 2017 CBRE Research © 2017 CBRE (Thailand) Co., Ltd. | 1

 M A R K E T V I E W BANGKOK RESIDENTIAL SALES

We are not worried about having an The increase in land prices means that
oversupply in the downtown area. As new projects will have to charge higher
of Q3 2017, there were 30,480 under prices than those of previously
construction units and 77.2% of this launched developments.
future supply has already been sold.
Based on reports from publicly-listed The midtown/suburban market still
developers and CBRE surveys, we faced weak demand due to a weak
believe that there are only a small economy; hence, together with a build-
number of built-but-unsold units in up of inventory, it is going to take time
the downtown area. for the market to absorb the oversupply
of units in some midtown/suburban
We think that the price growth rate areas.
has slowed down particularly for
projects which are not in the most The total number of completed
prime downtown locations. condominiums in the midtown/
suburban areas increased to 473,490
In this quarter, three super luxury units, rising by 10.7% Y-o-Y. There were
projects were launched, two of which 16,718 newly launched units, a 57%
are leasehold projects developed by increase Y-o-Y, as developers brought
Siam Sindhorn: Sindhorn Tonson (59 forward launches to Q3 2017.
units) and Sindhorn Langsuan (20
units). The two projects have an Many midtown/suburban developers
average asking price of THB 300,000 focused more on locations closer to the
and THB 330,000 per square metre, downtown area because they would like
respectively, for a 30-year lease. The higher prices per square metre.
only freehold super luxury project Developers decreased unit sizes; hence,
launched was Banyan Tree Residences lump sum prices did not rise.
Riverside Bangkok (133 units),
developed by Nirvana Daii PCL. The Even though banks have eased on
project is in the Riverside area with an mortgage lending, we think that only a
average asking price of THB 330,000 few potential purchasers can afford
per square metre. much higher prices because disposable
incomes have not been rising and the
Our outlook for sales is that it will be level of consumer debt remains high,
slower with buyers being more slowing sales down. We will have to
selective, especially for the most wait and see how buyers will react to
highly-priced products. the more new expensive products in the
midtown/suburban areas.
Sales performance will be mixed but
we don’t believe that prices in the Some developers continued to focus on
downtown area will drop, except for overseas sales for both downtown and
the few completed projects with high midtown/suburban projects. It remains
unsold inventory. to be seen whether this foreign demand
will be sustained especially for
midtown and suburban projects.

Q3 2017 CBRE Research © 2017 CBRE (Thailand) Co., Ltd. | 2

M A R K E T V I E W BANGKOK RESIDENTIAL LEASING

The number of expatriates holding Figure 3: Apartment Supply, Demand and Occupancy Rate
work permits in Bangkok was 85,832 in Supply Demand
Occupancy
Q3 2017, increasing by 0.3% Q-o-Q and Units Occupancy Rate Rate
1.3% Y-o-Y. Japanese nationals still 14,000 100%
comprised the single largest expatriate 12,000
90%
group working in Thailand, accounting 10,000
for 22% of the total number of issued 8,000 80%
work permits, followed by Chinese 6,000 70%
nationals at 14%. 4,000
60%
2,000
0 50%
The number of Chinese nationals has

2005

2007
2006

2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 2017
Q2 2017
Q3 2017
more than doubled since 2011 but they
typically have much lower housing
budgets and do not form a significant Source: CBRE Research, Q3 2017
level of demand in the traditional
expatriate areas. Condominium units (multi-ownership),
whose individual owners are buy-to-
Typically, expatriates prefer to live in a rent investors, are direct competitors
limited number of areas. The majority of apartments in the Bangkok
choose to live in Sukhumvit between expatriate residential leasing market.
sois 1-63 and 2-42, Silom/Sathorn and We estimate that 35-40% of units in
Central Lumpini/Siam. most new downtown condominiums
have been sold to buy-to-rent investors.
The Sukhumvit area has remained the Sixty percent of condominium units
most popular location for expatriates . under construction in the downtown
This is because of its easy access to the areas are one-bedroom or smaller units.
BTS Skytrain in Sukhumvit and the However, there is strong rental demand
large number of shops and restaurants . for two- and three-bedroom units.

Apartment units (single ownership) in The overall occupancy of downtown

the Sukhumvit area accounted for apartments has continued to be over
almost 80% of the total supply basket. 90%. Some apartment owners started
renovation of their units in order to
The supply of standard expatriate compete with upcoming supply of
apartments has only slightly grown condominiums for rent.
over the past ten years because of low
yields which makes it less attractive for Although total expatriate numbers have
developers to build new apartments . grown, their total budgets in terms of
housing allowances have not. As a
There are approximately 400 apartment consequence, there has only been little
units under construction or being change in asking rents.
planned compared to 13,000 future
condominium units in the downtown
area.

Q3 2017 CBRE Research © 2017 CBRE (Thailand) Co., Ltd. | 3

 M A R K E T V I E W BANGKOK RESIDENTIAL

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CONTACTS

FOR MORE INFORMATION ABOUT THIS BANGKOK RESIDENTIAL MARKETVIEW,

PLEASE CONTACT:

Research & Consulting, Thailand Residential Sales Services – Ad Hoc

James Pitchon Pornpimol Phuengkhuankhan
Executive Director Director
46th Floor, CRC Tower, 46th Floor, CRC Tower,
All Seasons Place, All Seasons Place,
87/2 Wireless Road, Lumpini, Pathumwan, 87/2 Wireless Road, Lumpini, Pathumwan,
Bangkok 10330 Bangkok 10330
t: +66 (0)2 119 1500 ext 2901 t: +66 (0)2 119 1500 ext 5797
e: [email protected] e: [email protected]

Research & Consulting, Thailand Residential Leasing Services

Natwatoo Rattanapairote Theerathorn Prapunpong
Researcher Director
46th Floor, CRC Tower, 46th Floor, CRC Tower,
All Seasons Place, All Seasons Place,
87/2 Wireless Road, Lumpini, Pathumwan, 87/2 Wireless Road, Lumpini, Pathumwan,
Bangkok 10330 Bangkok 10330
t: +66 (0)2 119 1500 ext 2926 t: +66 (0)2 119 1500 ext 1599
e: [email protected] e: [email protected]

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