The Bangkok condo market is suffering a downturn at the moment, as oversupply hits property sales the Thai city.
The sales rate for new condos launched in the Bangkok condo market in the second quarter fell to 15.7 per cent, an all-time low, beating the lowest previous quarter (35 per cent) in 2010 when the ‘red shirt’ political crisis brought Bangkok to a standstill.
On average, the normal quarterly sales rate for new launches in the Bangkok condo market is around 40-50 per cent.
However, oversupply is hitting the condo market in Bangkok.
According to Knight Frank’s market research, Bangkok hit a decade-long record for new condos entering the market, with 65,000 new units launched throughout 2018, up 11 per cent from 2017, the highest since 2009.
In the first and second quarter this year, new condo supply launched in Bangkok totalled 12,882 units and 14,988 units, respectively.
Knight Frank reported the condo market had cumulative supply from 2010 to the first half of 2019 of 594,453 units with a sales rate of 84 per cent, unchanged from 2017.
But according Dr.Sopon Pornchokchai, President of research and property valuation centre in Thailand, Agency for Real Estate Affairs , there are 525,889 empty homes in Bangkok Metropolitan Region (BMR) which are mostly sold but do not have any residents.
Empty homes (Every type of residential units) are residential units which use less electricity than 15 units per month which indicates that there is almost no use.
These 525,889 empty homes make 10.3 per cent of the 5,097,815 total housing units in BMR, which means that there is one empty house in every ten houses.
9.2 per cent of the total low-rise residential units are empty. While 13.9 per cent of the total condominiums are empty (there is 1 empty unit in every 7 condominium units).
As condominiums are mostly used for investment purposes, while low-rise residential units are mostly used for residential purpose, overseas property investors should invest in the Bangkok condo market carefully during this situation.