Bookings of Bangkok city condominium units slowed significantly in the first quarter despite the government's stimulus measures for the property industry.
A new survey by local property-consulting firm the Agency for Real Estate Affairs, new condominium bookings will be down 7 per cent year on year in the first half of 2008.
The survey covered property projects in six areas of Bangkok: Ratchadaphisek-Lat Phrao; Silom-Rama III; Onnuj-Baring; Ploenchit-Sukhumvit-Ekamai; the western side of the Chao Phya River; and Bangkok's outer suburbs.
As of the end of March, there were 344 newly launched condo projects consisting of 117,236 units. Of these, 90,969 units, or 78 per cent, had been booked. However, the majority of bookings were made last year, and only 9,342 of them were booked in the first three months.
Managing director Wason Khongchantr said yesterday that demand for city condos had decreased significantly.
There are several factors contributing to the slowdown, particularly regarding condominiums being built along mass-transit routes. The first is the need for a clearer government policy on development of the train routes, then there are concerns about environmental measures, and finally buyers are concerned that some projects are not being built according to the original plans, Wason said.
He said condos in only two of the construction areas had shown an increase in bookings in the first quarter: Ploenchit-Sukhumvit-Ekamai (up 33 per cent) and the western side of the Chao Phya River (up 20 per cent). Another three areas saw negative growth: Ratchadaphisek-Lat Phrao (down 46 per cent), Silom-Rama III (down 43 per cent) and Onnuj-Baring (down 14 per cent).
Wason said condominiums located along mass-transit routes were still offering the highest returns to investors, with an average of Bt18.3 per cent annually. The return rate was calculated from condo projects that were one to five years old and in accordance with price increases of 7.5 per cent and rental-fee increases of 4.7 per cent.
The highest annual return rates came from the Sathorn-Silom area (23.9 per cent), followed by Onnuj (19.3 per cent), Sukhumvit (17.7 per cent) and the Chao Phya riverside (17 per cent).