Slowdown in sales volume prompts discount campaign

• Bangkok’s prime condominium market showed a cautious sentiment amid economic uncertainties. Sale volumes fell q-o-q, prompting developers to offer discounts on unsold inventories. Local buyer confidence remained low, but demand from international buyers strengthened.
• The prime apartment market saw the year’s first reduction in vacancy rates, which fell by 62 bps q-o-q to 4.6%, reflecting strong rental demand fuelled by continued growth in the expatriate market coupled with local buyers’ declining housing affordability.

Economic headwinds keep new launches on hold

• The inventory of prime condominiums totalled 73,765 units, with no new completions. No new projects were launched during the quarter, likely from the developers’ cautious approach in response to current market conditions.
• Prime apartment stock expanded with the completion of The Grand Ekkamai (10 units), formerly known as K.P. Villa. This further solidified the Central East area’s position as the dominant area for apartment supply.

Prices and rents continue an upward trend

• Capital values saw a 1.9% q-o-q increase to THB 150,956 per sqm. Notably, projects with sales rates exceeding 80% saw a price escalation of over 10% q-o-q. Rising property prices and ongoing economic challenges continued driving rental demand.
• The rental market improved modestly, aligning with the ‘Generation Rent’ trend, where the affordability issue is a key driver. Despite the ongoing growth of condominium rents, the market yield fell slightly by 8 bps q-o-q, reaching 4.9%.

Outlook: Softened demand from local buyers and rising capital values

• The supply addition of around 2,000 units is expected by end-2024, with an average pre-sales rate of 64%. Despite anticipation for the launch of luxury projects, the market is likely to remain cautious among local buyers who have adopted a ‘wait-and-see’ approach.
• The rental market continues to strengthen as a cost-effective option, while capital values are anticipated to rise as premium products enter the market by year-end. This will maintain the market yield at 5.0% through 2024.