Bangkok's skyline viewed from the King Power Mahanakhon skyscraper in Sathon, a prime business district of the Thai capital.

New condo launches in Greater Bangkok this year are expected to fall short of projections, primarily attributed to weak demand amid an economic slowdown, according to consultant Colliers Thailand.

Phattarachai Taweewong, director of the research department at Colliers Thailand, said the condo market in Greater Bangkok was quiet in this year's second quarter because of tepid Thai economic growth and a weakening global economy.

"Overall, the Bangkok condo market has slowed due to a lack of positive demand drivers," he said.

"In the mid to lower-end segment, buyers are struggling with high household debt, elevated interest rates and a high mortgage rejection rate from banks."

According to Colliers' market research, 5,386 new condo units from 15 projects, with a combined value of 35.6 billion baht, were launched in Greater Bangkok in the second quarter.

Of this total, roughly 1,000 units from four projects were in the upper-end segment and located in inner-city areas, achieving a sales rate of 65%. The remaining units, located outside the city centre, had a sales rate of only 30%.

In total, the number of new condo units launched in Greater Bangkok in the first half of 2024 was 8,674 units, with a combined value of 49.3 billion baht. This represents a nearly 50% decrease compared to the 15,413 units launched in the corresponding period last year.

Despite the sharp drop in unit numbers, the sales value for the first half of 2024 saw a slight increase from 48.6 billion baht in the first half of 2023. This was because the majority of units launched in the first half of 2023 were in the lower-priced segment.

Mr Phattarachai said he expects new condo launches in Greater Bangkok this year to not exceed 25,000 units, lower than the projection of 30,000-35,000 units made in the first quarter.

"Developers found that sales in the second quarter were not as strong as expected," he said.

"Despite property tax incentives, residential unit transfers this year are expected to decline compared to last year due to banks' mortgage rejections."

The incentives include reducing transfer and mortgage fees to 0.01% each, down from 2% and 1% respectively, for residential units priced below 7 million baht. These measures are effective until the end of this year.

As of the end of the first half of 2024, condo inventory in Greater Bangkok totalled roughly 56,800 units.

Given the current weak demand, it is estimated that it would take 84 months to sell out this inventory, compared to 60 months under more favourable economic conditions, Mr Phattarachai noted.