Bangkok’s residential market downturn with 22.5% annual decline

Greater Bangkok’s residential market saw a downturn in the final quarter of last year, with new units sold shrinking by 14.5% compared to the previous year. This contributed to an overall annual decline of 22.5%, as reported by the Real Estate Information Center (REIC).

Vichai Viratkapan, the acting director-general of the centre, attributed this to a mismatch between supply and demand. The supply saw a 13% surge year-on-year, with 31,363 units valued at 240 billion baht, marking a 49% increase. On the flip side, demand dipped by 14.5%, resulting in the sale of 18,208 units worth 94.8 billion baht, representing a 19% decrease., said Vichai.

“This imbalance resulted in a 13.7% increase in the volume of unsold units, the highest year-on-year rise in four quarters, with a total of 209,894 units valued at around 1.17 trillion baht, indicating a 26.7% upswing in value terms.”

Owing to the escalating supply and dwindling demand, last year witnessed a slump in the average absorption rate, dropping to 2.7% from 3.8% the previous year.

Breaking down the new supply launched in the last quarter, condos accounted for 15,593 units, valued at 95.6 billion baht, representing an increase of 16.2% and 111%, respectively. Low-rise houses stood at 15,770 units, worth 144 billion baht, marking an increment of 10% and 25%, respectively.

The majority of new launches were units priced at 3 million baht and below, including 6,588 units, followed by those priced between 3.01-5 million baht per unit, amounting to 6,056 units.

The regions that recorded the highest sales in the last quarter were Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan with 2,315 units, followed by Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi in Nonthaburi with 1,711 units, and Muang-Phra Pradaeng-Phra Samut Chedi in Samut Prakan with 1,613 units.

However, Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi also had the highest inventory of unsold units at 20,271. This was primarily due to the high number of new launches in the region.

Looking forward, Vichai expressed optimism about the market’s recovery to match 2022’s performance, considered the best year post-pandemic. He projected a 25% increase in demand, potentially reaching 91,869 units worth 486 billion baht, provided the targeted economic growth is achieved, reported Bangkok Post.