Residential supply indicates focus on upper-end
New residential supply launched in Greater Bangkok in the first quarter declined by 3% in unit number but rose 22.2% in value as developers shift focus to the higherpriced segment.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC) said the decline in unit numbers with a rise in value show that unit prices of the new supply launched in the first quarter 2017 was higher than that in the same period last year.
REIC reported new residential supply launched in January-March this year totalled 24,103 units from 85 projects, which fell from 24,839 units from 113 projects in the same period last year.
However, the combined value of new supply rose to 94.6 billion baht from 77.4 billion baht.
Listed developers still dominated the market with 77.8% of the newly launched supply. They launched more supply than last year with 18,754 units from 50 projects, compared with 14,211 units from 43 projects, or a rise of 32%.
Of the total new supply, 13,502 units were condos from 31 projects worth a combined 55.9 billion baht. The unit number was down by 4.2% but value increased by 31.1%.
Listed developers had a 74.7% market share in the condo segment, with a launch of 18 projects and a total of 10,080 units, rising 58.4% from the first quarter last year.
For the low-rise housing segment, there were 54 new projects with 10,601 units worth a combined 38.8 billion baht with a decline of 1.4% in unit numbers but a rise of 11.2% in value.
Listed developers had 81.9% market share in the low-rise housing segment with the launch of 32 projects with 8,674 units, a rise of 10.5% year-on-year.
Prasert Taedullayasatit, president for premium business, Pruksa Real Estate, a property development arm of SET-listed Pruksa Holding Plc, said many developers plan to shift to upper-end segment this year due to the higher mortgage rejection rate in the lower-end market.
“Even a market leader in the lowerpriced segment diversifies into the highend market,” he said.
According to Phatra Securities Plc, there was a large number of completed, unsold condo units developed by nine SET-listed large developers, which totalled around 43,000 early this year, up from 38,000 early last year.
Of this amount, the largest number of unsold units was from SET-listed developer L.P.N. Development Plc.
Mr Prasert said Pruksa this year will launch six upper-end projects worth a combined 9.9 billion baht, and aim to have upper-end presales account for 7.9% of the company’s target presales of 52.9 billion baht by the end of the year.
“Premium or upper-end segment was valued at 107 billion baht last year,” he said. “We had an 8% market share in presales in the first quarter.”