An oversupply of unsold condos and land in inner Bangkok have experts predicting the property market is in for a 'price correction' in 2019. (File photo)

Average prices of land plots and condos in inner-city locations will be flat this year because of pressure from a massive oversupply that remains unsold, according to property consultant CBRE Thailand.

Managing director Aliwassa Pathnadabutr said average prices for land and condos this year will cool after soaring the past three years.

“There were no new record highs in price per square wah for plots last year," she said. "The highest price remains 3.1 million baht per sq w on Lang Suan Road, acquired in 2017. There will be a price correction this year.”

During 2015-18, average prices for land in Bangkok rose 12.5% per year, compared with 7-8% per year in earlier periods. This year, growth in average prices for land will be 0-5%, Ms Aliwassa said.

She said some developers bought land at unreasonable prices, causing condos to have sales prices that were too high, leading to a condo glut at several locations.

“A mismatch in pricing caused an increase in unsold condos," Ms Aliwassa said. "It will lead to a slowdown in new condo supply being launched this year.”

A price mismatch will see projects selling at 10-15% higher prices than others of the same grade nearby and recording sales rates of 50% or lower.

The end of 2018 saw about 9,400 unsold condo units in downtown Bangkok locations from a total supply of 34,000 units. Of the unsold amount, some 30% were completed units that were ready to transfer.

By location, Sukhumvit saw the largest number of unsold condos with a sales rate of 62%. Total supply in the Sukhumvit area was about 16,000 units.

Pathumwan came second with roughly 2,000 units from a total of 4,000 units.

These two locations saw the largest number of unsold condos, as they had a lot of new supply launched last year.

By grade, the super-luxury segment saw the best performance with a sales rate of 81% because of limited supply. It was followed by the high-end segment with a sales rate of 79%.

The poorest performer was the luxury segment, with a sales rate of 56%, while the mid-range rate was 64%.

“Developers that carry a large number of unsold condo units in highly competitive locations like Sukhumvit need to make a clearance, offering a discount,” Ms Aliwassa said. “Those planning to launch in those locations should wait, otherwise they need to compete with unsold inventory."

• See also: New land appraisal system coming