RESIDENTIAL RESEARCH 2H 2016

Transcription

1 CONDOMINIUM Market Report 2H 2016

2 Highlights The accumulated supply of condominiums as of 2016 was 435,805 units, a 7.6% increase from the previous half of the year and a Y-o-Y increase of 13.6%. The total new launches in 2016 were 52,195 units, making the total supply 435,805 units, of which 39,939 units or 76% were from the peripheral of, followed by the city fringe area with 14%. Also, there appeared to be 10% new supply in the CBD area at the end of The demand for condominiums was 315,393 units in 2016, representing a take-up rate of 72.4%, which is considerably less than the previous year. The average selling price of condominiums in the city area at the end of 2016 was THB 229,180 per square metre, a 2.2% increase Q-o-Q and a 5.3% increase Y-o-Y. The condominium market in 2016 continued to grow at a slower pace than the year 2015 due to the Thai economic slowdown. The supply from the peripheral areas dominated the market with total launches of around 39,939 units, approximately 76% of the total supply in This is due to the development of the mass transit extension route to the suburban area of ; many developers thus launched projects along the new mass transit route in the suburban area due to the availability of land with reasonable prices. However, the story of the MRT Purple Line (Tao Poon to Klong Bang Pai) will be a case study for both developers and condominium buyers, due to the fact that actual passenger numbers were nearly three times lower than the number of expected passengers as the line is not yet connected to other mass transit routes. This situation has affected the condominium market along the purple line where the line has been in operation last year but the unsold units are left in the market. Overall, condominium demand was weak due to the sluggish demand in condominiums in the peripheral area of, where many buyers were unable to secure mortgages. The condominium prices in the peripheral area of will remain stable, whereas the condominium prices in the CBD and city fringe will increase slightly due to the limited new supply. The new condominium units in the city fringe will compete with old condominium units in well-maintained buildings located in the CBD since the price of newly built units in city fringe will be higher than the old condominium units located in the CBD. FIGURE 1 Supply & New Supply of Condominium, Frank Khan Executive Director Head of Residential Department This year will be the market for resale condominium units located in the well-maintained projects in CBD since the gap between the price of resale condominium and the price of new condominium in CBD is wide. 2

3 CondoMINIUM MARKET REPORT 2H 2016 RESIDENTIAL Research Supply Trend The condominium supply at the end of 2016 amounted to 435,805 units, of which around 52,195 units were launched in 2016, representing an increasing of roughly 13.6% from last year. The majority of the new supply was from listed developers in order to create a backlog for future revenue; the high amount of supply doesn t reflect the recovery of condominium demand. FIGURE 2 New supply by location 2016 CBD / 5,259 / 10 % City Fringe / 7,597 / 14 % Peripheral / 39,939 / 76 % The majority of new launches were still in the peripheral area, representing 76% of 2016 s new supply, followed by the city fringe area at 14%. Also, the data has shown that there appears to be 10% new supply in the CBD in 2016, as shown in Figure 2. Mostly in the second half of 2016, nine new projects were launched in the CBD, while 12 and 50 projects were launched in the city fringe and peripheral areas, respectively. The majority of the new launches in the peripheral area of in the second half of 2016 was along the MRT Dark Blue Line Extension 2 (Hua Lamphong Thapra Laksong) and 3 (Laksong Phuttamonthon Sai 4), followed by the BTS Extension Line South Extension (Bearing Samrong Samutprakarn), with construction progressing over 80%. Demand Trend FIGURE 3 Supply, Demand and Take-Up Rate of There were approximately 315,393 condominium units being sold out of 435,805 units, representing a sold rate of 72.4%, a decrease from the previous year, which was 75.3%. The condominium units being sold in 2016 included only 26,595 units, decreasing by 59% compared to the year 2015, with approximately 64,170 units sold in This could be due to the weakening purchasing power of buyers and more stringent loan standards by banks. As such, developers were also launching special promotional campaigns to boost their sales; the campaigns included discounted purchase prices, special interest rate offers and more. 3

4 Pricing Trend The prices of newly launched FIGURE 4 Condominium Average Selling Price, 2008-Q condominium projects continued to climb throughout but at different paces, depending on the location. The average selling price of condominium in the CBD was THB 229,180 per square metre, increasing by 5.3%. This was followed by the average selling price of city fringe condominiums, increasing by 4.8% to THB 134,842 per square metre and the average selling price of condominium in the peripheral area of increasing by 3.6% to THB 76,002 per square metre. Outlook The outlook for s condominium market was gloomy for the condominiums located in the city s suburban area since demand growth was at a slower pace than supply growth. The price of condominiums located in the suburban area of is estimated to be stable. However, developers have to conduct a market survey before embarking on a condominium project in some particular areas in s suburbs. With the sharp increase of the selling price of condominiums in the CBD and city fringe, the resales market of condominiums in the CBD will compete with the new condominium projects due to the larger gap among selling prices. For those condominiums, end-users may look to the resales units in wellmaintained buildings rather than buying from the new projects due to the cheaper price tag as well as the unit size, which will be larger in the old buildings. Appendix: Condominium Location City Area: This is the Central Business District area as well as the area that surrounds it. It is popular for expatriates, tourists and affluent Thais for both for shopping and residences. It also includes areas along the Chao Phraya River on Charoen Krung and Rama III roads. The City Area can be divided into sub-areas as follows: o Central Business District (CBD): This is the area that encompasses sathorn Road, Silom Road and Wireless Road CBD corridors. It is an established business location with quick access to Sukhumvit, Rama 3 and the riverside areas. o Sukhumvit : This is the section of sukhumvit Road between Soi 1 to 63 (North side) and Soi 2 to 42 (South side) and the entirety of Rama I and ploenchit roads. The area is popular with expatriates, tourists and affluent thais. o Rama III and the Riverside: This is the area that stretches along Charoen Krung Road of the Chao phraya River southward just past the Sathorn Bridge, and to the north of Sipraya Road as well as the area along both side of Narathiwas Road and portions of Charoen Nakhon road immediately next to Taksin Bridge. City Fringe Area: The area is located on the edge of the City Area, and provides easy access to the City Area. This area is an alternative for condominium buyers due to the convenient access to many shopping and transportation centres. The City Fringe Area can be divided into the following sub-areas: o Ratchada-Ladprao Area: This is the area with close proximity to the Blue line MRT stations covering both side of Ratchadapisek Road and the beginning of Ladprao Road to the West. 4

5 GLOBAL BRIEFING For the latest news, views and analysis on the world of prime property, visit KnightFrankblog.com/global-briefing o Phahonyothin Area: This is the up and coming area that offers a convenient access to many academic institutions and government agencies. The area covers Phahonyothin Road between soi 1 to 13, and Soi 2 to 14. o Late-Sukhumvit Area: This is also another up and coming area that is currently very popular with many young local and foreign professionals and major condominium developers. It covers sukhumvit Soi 63 to 81 and 42 to 50. Peripheral Area: The three major areas under this classification are: o Outer Sukhumvit: This is the section of Sukhumvit Road on both sides after Sukhumvit Soi 81, stretching to the Bangna intersection. o Thonburi Area: This is the area covered by the new BTS extension on the Silom (Light Green) Line from saphan Taksin to Bang Wa. o Other Areas: These areas are outside of the areas already mentioned. Most of the remaining condominium areas are scattered Appendix: Condominium Classification Super Prime and Prime: o The location is in the City Area. o The selling price of the unit must be at least THB 170,000 per square metre. o The majority of the units in the project must be over 50 square metres. o The common facilities and unit decoration must be of very high standard or iconic. Grade A: o The location is in the City or City Fringe Area. o The selling price of the unit must be within the range of THB 120, ,999 per square metre. o The common facilities must be of high standard. Grade B: o Any location in o The selling price of the unit must be within the range of THB 80, ,999 per square metre. Grade C: o Any other condominium projects that do not qualify for the classification mentioned earlier. Thailand Contacts Phanom Kanjanathiemthao Managing Director +66 (0) Ext 124 phanom.kanjanathiemthao@th.knightfrank.com Chaturawit Wattanapruk Executive Director +66 (0) Ext 120 chaturawit.wattanapruk@th.knightfrank.com Surasak Limpa-Arayakul Head of Valuation and Advisory +66 (0) Ext 143 surasak.limpa-arayakul@th.knightfrank.com Roong Sitthisankunchorn Head of Property Management +66 (0) Ext 144 roong.sitthisankunchorn@th.knightfrank.com Marcus Burtenshaw Head of Commercial Agency +66 (0) Ext 121 marcus.burtenshaw@th.knightfrank.com Frank Khan Head of Residential +66 (0) Ext 280 frank.khan@th.knightfrank.com Risinee Sarikaputra Director, Research and Consultancy +66 (0) Ext 180 risinee.sarikaputra@th.knightfrank.com Phuket Contact Nattha Kahapana Knight Frank Phuket +66 (0) Ext 300 nattha.kahapana@th.knightfrank.com across the city, including Srinakarin, Chaengwattana, Kaset-Navamin, petchakasem, Samutprakarn sukhumvit, etc. Recent market-leading research publications Pattaya Condominium condominium market 1H Q Pattaya Condominium 1H 2016 Huahin Market condominium report 2016 market Q Huahin Market report 2016 COMMERCIAL Research Office Market condominium Overview market Q4 Q Office Q Knight Frank Research, Reports are available at KnightFrank.co.th/Research Prime and Super Prime Condominium condominium Market Report, market Year-End Q Prime and Super Prime Condominium Market Report, Year-End 2016 Important Notice Knight Frank LLP 2017 This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members names. 5