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Sales steady but prices to drop

The total value of new housing supply to be added to the Bangkok property market during the second half of the year is expected to fall while the volume will hold steady because of a projected pickup in low-priced units, according to Sopon Pornchokchai, managing director for the Agency for Real Estate Affairs.

Mr Sopon said 182 projects with a combined total of 26,353 units worth 80.59 billion baht, were launched in the first half of the year, down from 120 billion baht worth of projects launched in the same period a year ago.

``The number of new supply launched was stable but the value fell due to a drop in the introduction of new luxury condos in the cental business district,'' he said.

In the first half of the year, the largest number of new housing units was for those priced between 500,000 and one million baht, with 7,719 new units on the market. Another 6,294 new units were priced between three and five million baht, and 6,274 cost between one and two million baht.

In terms of development value, units priced at 3-5 million baht totalled 24.2 billion baht, followed by units priced at 5-10 million baht worth 23.14 billion baht and units priced at 10-20 million baht worth 14.52 billion baht worth.

Mr Sophon said townhouses priced between 700,000 and one million baht in the outskirts of Bangkok had good sales potential in the second half of the year adding that the development condos priced lower than one million baht would pickup due to increased demand from the budget segment of the market.

He also noted that the introduction of luxury condo units in the second half of the year would slow down because of heavy speculation in this segment last year as well as the expectation of rising interest rates in the months ahead.

The three most popular zones for developing new housing projects in the first half of the year were Ratchada-Lat Phrao, Rangsit Klong 1-7, and Yannawa-Silom, respectively.

Mr Sophon said the sales rate of newly launched projects averaged 15.9% per month in the first half of the year, up from 11.5% in the same period of 2004, with the main driving force being intensive sales promotions such as cash discounts and the offering of free furniture.

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