In the first quarter, Bangkok saw 11,300 new condo units from 30 projects enter the market. PORNPROM SATRABHAYA

Property incentives should help boost new condo demand in Bangkok by at least 20% this year after a market slowdown in the second quarter, says property consultant Nexus Property Marketing.

Managing director Nalinrat Chareonsuphong said the formation of a new government will not affect the property market, but policies such as property incentives or the new lending curbs would.

"Since 2006 there have been five changes in government and property prices between the pre- and post-election periods continued to rise," she said. "But cooling measures and incentives have a strong impact on the property market."

While property incentives such as a reduction in property transfer and mortgage fees will boost the market after they take effect, the loan-to-value (LTV) limits will cool down the market in the second quarter, said Mrs Nalinrat.

If the current government uses the property tax incentives to boost economy and property sector in the second half, there will be additional 10,000-20,000 units of condo in Bangkok being transferred within the year, she said.

Under the current situation with the LTV limits taking effect and no property tax incentives, new condo demand in Bangkok will total around 50,000 units by the end of the year, Nexus estimated.

New condo supply launched in Bangkok will slow down to 50,000 units this year from usual 55,000-60,000 units per year after the market was hit by the LTV limits.

In the first quarter of 2019, condo supply newly launched in Bangkok totalled 11,300 units from 30 projects, a drop of 20% from the same period last year. A slowdown in new condo supply will continue in the second quarter due largely to the LTV limits, general elections and long holidays.

Of the total new supply launched in the first quarter, the largest number was 2,400 units, accounting for 20% was in Phra Khanong-Suan Luang-Bearing, followed by Phaya Thai-Ratchadaphisek with 1,938 units (17%) and Lat Phrao-Wang Thong Lang (1,580 units and 14%).

Most of the new condo supply launched in the first quarter or around 8,500 units, 75% of the total, were priced lower than 75,000 baht per square metre and between 75,000-100,000 baht per sq m.

"This showed that developers adjusted to launch new supply in the real demand segment," said Mrs Nalinrat.

"There were also new projects from new players that accounted for 47% of the total, up from the usual 30%."

According to Nexus, the average price of new condo supply launched in the first quarter dropped by 1% to 139,400 baht per sq m from 140,600 baht in the fourth quarter last year as the majority of new supply was located in outer city areas.

She said the take-up rate of new condo supply launched in the first quarter also slowed to 50-60% as developers focused on selling condo inventory that were completed and remained unsold to capitalise on the LTV limits that began on April 1.

"Mid-priced condos will keep growing as real demand continues to drive the market," she said. "In the high-end segment, developers should be more cautious as investment buyers in this segment will slow."

With growth of the mid-priced market and limited new supply in the high-end segment, the average price of new condo supply being launched in Bangkok this year will rise no higher than 5-6%, said Mrs Nalinrat.