Bangkok target 50,000 new apartment units by 2022

New apartments in Bangkok are expected to exceed 50,000 units in 2022, beating levels seen in 2020 and 2021 but still falling short of levels seen before the Covid-19 outbreak. If the war between Russia and Ukraine doesn’t escalate and further, and if monkeypox is kept under control (and other ‘problem’ areas of the international economy are kept under control), the prediction could be revised to more than 50,000 units, according to Neeranuch Kanokvilairat, the manager of research and consulting at property consultancy Edmund Tie & Co.

“If monkeypox becomes an outbreak, it will affect overall investment and economic recovery. Developers are also keeping an eye on the Russia-Ukraine war as it has an impact on construction costs.”

The real estate market in Bangkok showed signs of life in the first five months of 2022, with new units surpassing the entire record set in the past 2 years. The Covid pandemic affected the apartment sector in 2020 and 2021, stalling the debut of several new buildings, while in 2020, the figure dropped by 60% from 2019, and it fell by another 15% in 2021.

Property developers interested in the Chinese market were also concerned about China’s ongoing zero Covid policy.

“If Chinese buyers and investors fail to come back to Thailand in the second half of 2022, developers must adjust their release dates to accommodate the circumstances.”

The bulk of buyers in Rangsit were locals looking to buy an affordable place to call home, while those in Thonburi wanted buildings near the MRT Blue Line. Students and employees of the government and state-owned companies preferred Vibhavadi, Don Mueang, Chaeng Wattana, Lak Si, Pak Kret and Nonthaburi.

Neeranuch says locations in outer city areas saw the largest number of launches because plots in inner city areas were scarce and their prices were too high to do affordably-priced units while developers today want to tap the mass market segment.

“Almost 80% of the total launch in this period had starting prices of 1.2 million baht and lower per unit, meaning that the new supply aimed at real demand whose purchasing power was weaker amid rising living costs.”

Since the beginning of the year, new apartment buildings in the central business district were limited. But, the units in the second half would be higher because developers are betting on Thailand’s reopening.

SOURCE: Bangkok Post