Bangkok Living is highlighting the potential of condo development in the fringe areas of the city, thanks to a steady demand for such properties and a low supply of suitable land for further developments.
It is expected that in 2017 there would be new projects launched by those that were showing lower sales towards the end of last year. The company is highlighting the higher sales prospects of the outer areas of the city and pointing out that condo prices could rise as a result.
The supply of condos on Sukhumvit Road has risen by up to 5000 units each year over the last three years although it should be taken into consideration many of the new projects over the last few years have not featured as many condos in each building. In 2012/2013 the average project contained 465 condo units but between 2014 and 2016lk the average was just over 300.
Data gathered in 2016 shows that fringe areas had a total new supply of condo units of 4,832, almost two-thirds of which come from high-rise developments. The remainder comes from low-rise projects.
In addition, most of the new condo stock falls into the grade B category, around 41% of the total supply. 37% of the total are grade C condos. Only 22% are grade A condos, but this is much higher than in 2015 when only 15% fell into the grade A category.
Bangkok Living sees this increase as an indication of the potential rise in price of condos in the fringe areas of the city. It is estimated that demand for condos in the outer Sukhumvit areas last year was more than 33,000 units with a current total supply of just under 41,000 units. The accumulated sales rate of just over 81% is slightly down on the same figure the previous years.
In 2016 the total unit sales in the area were 3771, but this was lower than sales seen in the four or five years prior to that. This can be attributed to the much lower efforts in marketing on the part of the developers at the end of the year. This definitely had an impact on the sales of condos in 2016. The supply of new condos has not been much higher than the demand. The continuing high rate of cumulative sales shows the potential of Sukhumvit’s outer areas in condo development.
The compound annual growth rate of the price level of the outers Sukhumvit condos is around 9.78% a year. The peak price for condos in this area last year was Bt163,673 per square metre. At the lower end of the market, the lowest price per square metre was Bt74,150.
The condos in the area had an average price last year of Bt101,493 per square metre, When looking at prices for previous years it was clear that property prices have risen a great deal. Property experts consider that condos that have a price of Bt85,000 per square metre offer good value for money in comparison to other properties on the market.
Bangkok Living also considers that there is still considerable room for prices to rise, keeping them in line with prices for other properties in the area.