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Transit line extensions spur condo rush

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Condos in locations along mass transit line extensions have become more popular because of affordable prices, while units in the inner city face a glut and are overpriced, says SET-listed developer Supalai Plc.

Managing director Tritecha Tangmatitham said condos in some parts of the inner city, particularly the central business district (CBD), are risky as new supply multiplies and the price per square metre is quite high.

"Middle-income earners can no longer afford new condos in the inner city," he said. "Foreign buyers are now looking for ones on the city's outskirts where mass transit line extensions will reach as prices are much lower," he said.

The overall condo market in the first half was healthy, with strong demand, but the number of newly launched projects was lower than in previous years.

High household debt remained a key problem for buyers of units priced under 2 million baht. In the first half, the bank mortgage rejection rate overall was as high as 20% while that in the higher-end segment was only 4%.

During the first half, Supalai posted 18 billion baht in presales and still maintained a presales target of 33 billion baht with 26 billion baht in revenue by the end of the year, he said.

Mr Tritecha said the company will delay the launch of a new high-end project, Supalai Icon, on Sathon Road from the fourth quarter this year and open it next year as the current presales are in line to achieve its target.

The company will replace a high-end project with a low-rise condo project with 200-300 units in a location near an extension of mass transit lines. The developer on Tuesday will launch Supalai Veranda Ramkhamhaeng worth 6 billion baht via the use of online booking. It will comprise three buildings with a total of 2,073 units priced at 76,000 baht per sq m on average or starting at 1.89 million baht.

The project is to be located on a 15-rai site on Ramkhamhaeng Road near an Orange Line station. It spent 1 billion baht to acquire the plot, with a land price of 160,000-170,000 baht per sq wah.

The company will also spend 200 million baht to develop a community mall on the plot, he said.

According to Supalai's market research, the number of condos newly launched in the Ramkhamhaeng area during 2013-18 totalled around 5,600 units. Of this amount, 4,400 units or 78% were sold.

The price per sq m of new condos in this location rose from 74,000 baht in 2013 to 88,000 baht this year.

Ramkhamhaeng is one of the most attractive locations as construction on the Orange Line between Thailand Cultural Centre and Min Buri has started, said property consultant Colliers International Thailand.

The location will become more interesting as The Mall Ramkhamhaeng 2 on a 30-rai plot is refurbished to be a mixed-use complex, scheduled to be completed in the next few years.

In the last decade, there were a total of 14,907 condo units launched in the Ramkhamhaeng area and there will be 4,273 new units launched in the second half of 2018.

SPALI shares closed yesterday on the Stock Exchange of Thailand at 23.90 baht, down 20 satang, in trade worth 41.24 million baht.

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