Knight Frank Thailand Forecasts Bangkok Condo Market Recovery in 2022

Mr. Nattha Kahapana, Deputy Managing Director and Head of Knight Frank Phuket, Knight Frank Thailand, remarked, “Although the third quarter of 2020 showed signs of recovery, the new Covid-19 outbreak weakened purchasing power in the fourth quarter of 2020 again, causing the overall condominium market in 2020 to decline compared to the previous year. Buyers postponed buying and selling activities, and spent more time making decisions due to concerns about the economy. Moreover, the purchasing power of foreigners has not returned because of the severe epidemic situation in Europe that does not seem to be easing. Also, Thailand continues to restrict foreign travel to only certain groups of foreign countries. Operators thus still have to rely on purchasing power from people in Thailand who comprise the main buyers.

At this time, these buyers are those with real demand for homes, and they have been affected by layoffs or salary reductions. This results in the denial of credit from financial institutions as banks are concerned about the borrowers’ incomes, as affected by the situation, and the decline in purchasing power. Moreover, the purchasing power of foreigners has disappeared from the market. It was found that the remaining foreign quota units comprise more than half of the total set aside for the quota. As a result, there are still many remaining units left for sale, causing condos to be in oversupply in some locations. Some projects have thus stopped sales and postponed their launches. Operators are trying to reduce the number of new projects launched, and it is expected to take 1 to 2 years to sell off the remaining units in order to keep the market in equilibrium.”


From the research of Knight Frank Thailand, it was found that, in Q4 2020, the supply of newly launched condominiums declined. There were 4,196 new condominium units launched for sale, which reflects a decrease of 77.8 percent, compared to the same quarter of the previous year, Q4 2019, where 18,926 new units were launched into the supply. The number of new units launched in Q4 2020 decreased by 47.2 percent, compared to the previous quarter; the supply of new condominiums launched for sale in Q3 2020 was 7,943 units.

Most of the new condominiums launched in Q4 2020 include Grade C condominiums with a selling price of 40,000 to 75,000 baht per square metre, accounting for 65 percent of the total new launches, followed by Grade B condominiums with a selling price range between 85,000 to 120,000 baht per square metre, accounting for 35 percent. In Q4 2020, no new Grade A condominiums, with prices exceeding 150,000 baht per square metre, were launched. In terms of location, most of the newly launched condominiums, or 95 percent, are situated in the suburbs of Bangkok, followed by condominiums in the City Fringe around the Central Business District (CBD) area, accounting for only 5 percent. In the actual CBD area, no new condominiums were launched for sale, as of Q4 2020.Advertisement


In Q4 2020, the overall market slowed down from Q3 2020; it was affected by the Covid-19 epidemic flare up, resulting in a decrease in purchasing power. In Q4 2020, there were 1,391 new units sold from the new supply in Q4 2020 of 4,196 units, representing a 33 percent sales rate. There was a 17 percent drop in sales when compared to the same period last year, or a 6 percent decrease compared to the previous quarter. The sales rate of new condominiums launched in Q3 2020 was 39 percent.

Selling Prices

The selling prices of condominiums in Q4 2020 dropped in all areas from Q3 2020, with the selling price of condominiums in the CBD area, as of Q4 2020, being 251,435 baht per square metre. This marks a decrease of 5 percent compared to the last quarter. The selling price of condominiums in the CBD area, as of Q3 2020, was 265,000 baht per square metre. The selling price of condominiums in the City Fringe area, as of Q4 2020, being 123,560 baht per square metre. This marks decreasing by 15.4 percent compared to the previous quarter. Condominiums in the City Fringe area, as of Q3 2020, had an asking price of 146,000 baht per square metre, while the asking price of condominiums in suburban Bangkok, as of Q4 2020, was 68,945 baht per square metre, decreasing by 13.2 percent from the previous quarter. As of Q3 2020, the asking price was 79,400 baht per square metre. For condominiums in the Bangkok suburbs, the selling price dropped in Q4 2020, due to operators accelerating the sales of a large number of remaining units in order to generate income and increase liquidity, to be reflected in their financial statements. Therefore, operators reduced the prices of completed projects that are ready for occupancy, and organised promotions with attractive prices to speed up sales and unit transfers. Such promotions were able to draw both investors and buyers with real demand for residences. Some projects were able to close sales by offering lower selling prices than other projects in the same location. Moreover, new projects launched in Q4 this year have lower prices. On the whole, the condominium market in this period represents a true buyer’s market.


Mr. Nattha concluded that 2020 was a challenging year for the real estate business, with the spread of Covid-19 in Thailand and around the world being a key factor that caused the condominium market to be stagnant, without the growth that it should have experienced. As such, the condominium market in Bangkok and its vicinity in 2021 is likely to have a similar direction from that of 2020, as operators continue to rely primarily on purchasing power in the country. Moreover, operators are still postponing the launches of new projects as they try to sell their sizable stocks of remaining units. There is expected to be around 20,000 to 30,000 new condominium units launched in 2021, and such units will come with selling prices that focus on buyers with real demand. Also, many large developers are turning to the development of low-rise projects because of the reduced risk, where they can gradually develop the project in phases. The condominium market may see a rebound in mid-2022, which is expected to be a time when the Covid-19 epidemic is under control. Another key factor includes the fact that banks are cautious when lending to operators, as they are not confident in direction of the business.

Some operators thus choose to enter into joint venture with foreign companies. In addition, there are good signs of Chinese investors trying to buy condos as residences or investments in the future, even though they are unable to enter the country. They employ methods like communicating through the embassy and brokers in China, and they view Thailand as a liveable and safe country in the event of an epidemic. However, the market still needs to wait for the epidemic situation to ease and travel between countries to resume before it can recover, with the return of foreign purchasing power and employment back up in accordance with the country’s economic direction. However, if there is a political crisis, the chances of recovery may go the opposite way, and in this challenging market, operators must prepare a preventive and adaptive plan to cope with upcoming and changing situations in the future.

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