Thailand’s recovering economy has helped spur the demand for housing and resurgence of demand for condominium, a segment that has been shunned over the past 2-years ever since the start of the pandemic.
The Agency for Real Estate Affairs (AREA) came out to say that its survey during the month of October 2022 showed that launches totaled 11,060 units in October 2022, up 29% month-on-month (MoM), led by the condo category. The October residential launch breakdown was 48% condo units, 32% town house, and 19% in single detached house segment.
The average price for new launches was 4.4 million Baht/unit, down 43% MoM, as there were more low-end condo starts.
Single detached house launches totaled 2,131 units, down 49% MoM, with far more units priced between 5-10 million Baht/unit, AREA said.
Many listed companies such as Supalai Plc (SPALI), SC Asset Plc (SC), Sansiri Plc (SIRI), and LPN Development Plc (LPN) started single detached house projects in September, while SPALI unveiled a new high-end single detached house estate in October called Supalai Grand Essence @Tha Phra Interchange (18 units with prices ranging 22 million Baht/unit).
As for the town house segment they saw 3,548 units launcehd, up 24% MoM—SPALI, LPN, and SIRI launched mid-range the town house projects in October.
The condo starts totaled 5,306 units, up 254% MoM (from a very low September number), concentrated in the low-end to mid-range (1-3 million Baht/unit). The proportion of launches by listed players increased from 82% in September to 88% in October 2022.
The mean new single detached house price was 5.9 million Baht/unit, down 55% MoM. The average new condo price was 3.9 million Baht/unit, up 105% MoM, from a very low September base (1.9 million Baht/ unit).
Ananda Development Plc (ANAN) meanwhile launched condo projects in October, IDEO Ramkamhaeng Lamsali (2.2 billion Baht), Culture Thonglor (3.3 billion Baht), and Culture Chula (6.2 billion Baht). The mean new town house price was 4.4 million Baht/unit, up 45% MoM.
Rise in Take-up Rate
The rising economic activities and confidence has helped raise the take up rate of the property sector.
The mean take-up rate for new launches rose from 16% in September to 18% in October (up from the September 2022 low), led north by the condo category. The condo take-up rate increased from 22% in September to 27% in October, due largely to more bookings of condo units priced below 3 million Baht/unit.
In contrast, the town house take-up rate fell from 13% in September to 8% in October, squeezed by lower bookings of town house units priced below 5 million Baht/unit. The single detached house take-up rate declined from 15% in September to 11% in October, led south by lower bookings of single detached house units priced below 5 million Baht/unit.
Phoowadol Phoosodngern, analyst at Bualuang Securities says that based on the current plans of the residential property firms under coverage, Q4 2022 looks set to be the heaviest launch quarter of 2022 at 112 billion Baht, up by 160% YoY and 58% QoQ.
“We expect both unlisted and SET-listed firms to maintain high project start numbers, especially in low-rise categories. Low-rise launches in November are likely to exceed the 5,679 units marked for October. Also, the mean take-up rate for October should rise further MoM. We are currently focused only on our top picks—AP, SIRI, and SC,” Phoowadol says.
All this comes as good news for the property sector that has been reeling from the impact of the lockdown and economic malaise caused by the Covid-19 outbreak during 2020-early party of 2022.
The higher take up rate has also helped the listed companies on the Stock Exchange of Thailand (SET) to see their earnings rise during the past quarter (Q3 2022).
Thailand’s property sector has been reporting better than expected earnings amid rising number of units transferred for most of the developers.
Almost all big developers have reported their quarterly earnings for the quarter ending September 2022 and almost all of them have reported earnings that beat the expectations of the market and analysts.
The companies released their results with most of them beating the estimates by analysts and the market expectations with LPN Development making one of the biggest come back in the industry.