Housing markets in terms of newly launched units in Bangkok during the first half of 2020 were shrunk substantially. On the contrary, the number of supplies were increased to 221,192 units which need around two years to absorbed.
Dr.Sopon Pornchokchai, President, Agency for Real Estate Affairs (www.area.co.th) said that during the first half of 2020, 151 projects were launched (32.3% reduction) with 30,028 units (47.8% reduction) for altogether Baht 124.429 billion (USD 4.014 billion) or 45.3% reduction from 2019. An average price was Baht 4.144 million or USD 133,677 per unit with an increase of 3.4% compared to 2019.
While 30,028 units were launched in the first half of 2020, 6,219 units of them were sold. 27,717 units were sold during the same period. This implies that 21,498 units of those launched prior to 2020, were sold during the first half of 2020. The number of units sold in the first half of 2020 were only half of last year in the same period.
Normally, condominiums were launched some 50-60% of the supplies. However they were only 29.3% in the first half of 2020. Townhouses were the largest proportion of units launched (14,060 units or 46.8%) followed by detached houses of 4,455 units (14.8%). Actually detached houses had the largest proportion of value of newly launched units in the first half of 2020 for 32.6%
As of mid 2020, 221,192 units were still available on the hand of developers. These supplies were needed some two years to be absorbed if there were no new supplies. Otherwise, the duration of absorption would be prolonged for another year or two.
Of these 221,192 units for sale today were condominiums (owner-occupied apartments), townhouses (townhouses) and detached houses for 40.9%, 32.6% and 16.7% respectively. Only 42,064 units out of 221,192 units (19%) were completed built. However 52% of theses 221,192 units were constructed for less than 40% if there appeared any crisis, these units would disappear.
AP (Thailand) Plc was the champion of developers with the largest number of units and value launched in the first half of 2020. AP launched 16 projects with 2,492 units (8.3% of the total) valued at Baht 15.730 billion (USD 507.4 million) or 12.6% of the total. While the average price was Baht 4.144 million or USD 133,677, it was Baht 6.312 million (USD 203,613 for the AP.
Considering house prices changes, there can be seen in different aspects as follows:
1. An average price of newly launched housing units was Baht 4.144 million or USD 133,677 per unit with an increase of 3.4% compared to 2019.
2. For developers’ housing units offered for sale during end 2019 to mid 2020, prices were discounted for 3.5% This implied that the market situation was not good. Developers had to discount to some extent. There might be further discount in the near future. However it might not be significant. In the case of condominiums, the discount was 5.2%
3. For second hand houses, there was no change. Normally existing housing supplies were cheaper to new housing units for 25% - 35% Therefore, they were not much affected by the recession.
On the whole, Covid-19 has had significant effect to Bangkok housing markets. However it is expected that the situation would recover in 2021 except the pandemic still exist. Compared to other sectors particularly commercial and leisure properties, housing is still in a better shape.