‘Nexus’ reveals real estate statistics for 20 years with 4 cycles expected this year to see the private sector develop products that meet the needs of Real Demand
Mrs. Nalinrat Charoensuphong, Managing Director of Nexus Property Marketing Co., Ltd. revealed that on the occasion of the 20th anniversary that Nexus has opened a consulting service for marketing, sales to real estate in all groups whether real estate for residential, commercial real estate including real estate research and appraisal We have accumulated a lot of information in the entire market. We have seen market growth based on product characteristics. The most noticeable market change is from 2020 onwards, or during the Covid-19 period. got to know people around the world by this time Therefore, all 20 years of information has been published to let them know the growth. and to predict future trends more accurately.”
condominium market
“Over the past 20 years, we have seen a significant change in the condominium market. both in terms of supply, demand, price, location and consumer behavior and we believe that the direction of the market will continue to adjust according to consumer behavior changing rapidly and epidemic incidences that make market forecasts more difficult.”
“As a result of Nexus’s 20-year data research, it was found that at the end of 2021, the supply of condominiums in the Bangkok Metropolitan Region was 694,000 units, and the growth of supply was divided into 3 main cycles. In the first period 2001-2009, most condominium developments will be concentrated in the city center and around the city center The cumulative number of units developed is 123,000. The market has begun to change significantly in the second cycle during 2010-2018. Development has expanded to more suburban areas. And there are more developers coming into the market. The supply has increased exponentially. The cumulative supply during the 8-year period increased to 482,000 units. However, during the third cycle of 2019 – 2021, the market contracted significantly. Due to the impact of economic factors and unforeseen events such as COVID-19, during the past 3 years, the supply has increased by only 80,100 units. In 2021, only 16,800 units of new condominiums were opened. This is the lowest in 12 years.”
“Condominium prices in Bangkok over the past 20 years have increased up to three times from an average price of 48,000 baht per square meter in 2001, the highest adjustment in 2018. 2019 is an average price of 141,800 baht per square meter. But due to the impact of COVID-19 The developer has adjusted the product format. to be more in line with the market demand. As a result, the average price has dropped to 128,600 baht per square meter at the end of 2021. While new condominiums opened in 2021, developers have returned to make the prices more affordable for customers. climb According to research, new condominiums opened in 2021 have an average price of 86,100 baht per square meter. This is a result of the product model in the market. that has adapted to the budget condo market more.”
As for the demand for condominiums Sales generated during the year It is a sales from real demand for housing. The main factor that led buyers to make decisions over the past year. It is still a ready condominium at a reasonable price. However, 2021 saw the lowest condominium sales in the past 12 years, with sales of only 23,400 units, with a total market share of 94%.
As for the condominium market trend in 2022, Mrs. Nalinrat Charoensuphong predicted that “the current condominium market in the cycle will gradually move back to grow slowly. The total market price may be stable. or not very much Due to new condominium developments, more and more will penetrate the budget condo group. In addition, the condominium business will change rapidly from 20 years in the real estate business. found that the market has grown exponentially growing demand for housing and drive condominium prices to grow above the economic growth rate. and real income, so from 2022 onwards
In the medium term, growth in the condominium market will remain more stable The increase in prices will reflect real demand even more. In 2022, it is expected that the condominium market in Bangkok There will be at least 30,000 new projects launched and supply will grow in 2 main markets, which are the luxury market, the city center and the city condo market. and affordable condos outside the city The growth will come from 2 main factors that are completely different, namely condominiums in the middle of the city. caused by the need for a second home near work, near school, or when older want to move into the city for convenience in travel Maintaining a compact, safer and more comfortable housing And the city condo market is caused by the expansion of the city and various electric trains, as well as the demand of consumers who want to live near the BTS. For the convenience of traveling and working
commercial space market
Mr. Teerawit Limthongsakul, Managing Director of Nexus Real Estate Advisory Company Limited, revealed that “In the past 20 years, the commercial market There have been changes in many areas. both in terms of the number of rental spaces rental behavior and rental price including other factors affecting the market expansion, such as the construction of electric trains both on the ground and underground. Currently, the office building market and shopping center market are affected by the epidemic of Covid-19 quite a lot. swing more Because there are sensitive factors that can easily affect the market, such as consumer confidence. political unrest and epidemic events.”
office building market
“According to the survey of the office building market in Bangkok over the past 20 years, the office building market has expanded greatly. and has always been growing well One factor contributing to the distribution of office buildings is the construction of electric trains. causing more office buildings along the electric train lines which can be divided into 2 main periods: in the first period of 2001 – 2009 In the beginning, it was an uptrend in the market from the recovery of the Tom Yum Kung crisis. The market had a particularly rapid rebound in 2004. Then the global economy slowed from the hamburger crisis and political unrest in the country. causing the office building market to be affected as well Therefore, the market contracted slightly in 2009. The first phase saw an average of 8% new supply entering the market per year and the market grew approximately 1.5 times, then entered the second phase, during 2010. – 2021, the market starts to expand again with new supply entering the market on average 2-3% per year. However, the epidemic of COVID-19 As a result, the market slowed again. And this is the highest contraction in 20 years. The supply for the whole Bangkok at the end of 2021 totaled about 6.3 million square meters. an increase of approximately 2.3 times from 2001.”
“In terms of rental rates From the recovery of the economic crisis during the first period, the office building market in Bangkok It has always had a very high occupancy rate, with the first occupancy rate around 70% at the beginning, and then a high rebound to around 90-95% despite increasing supply. in the market at a later time While in the second period, the rental rate remained stable at about 90-95% for almost 10 years and contracted again due to the epidemic of Covid-19. The rental rate dropped to 88%, the lowest rate since 2004.”
“In this regard, the rental price is consistent with the occupancy rate. In 20 years, the average rental price has doubled from 380 baht/square meter/month in 2001 to around 800 baht/square meter/month at the end of the year. 2021, with rental prices increasing at around 3-5% per year all the time due to the COVID-19 outbreak. Including new supply added to the market continuously. As a result, the rental price has dropped significantly. Average rents fell 1% YoY, the lowest contraction in 20 years in the office building market.”
by Nexus continues to predict that There will be a supply coming into the market continuously. It is expected that new supply will reach 1.9 million square meters in the next 5 years, representing more than 90% of Grade A office space, resulting in average rents likely to increase from new buildings, including old office buildings that will disappear. to the future according to the age of the building however Covid-19 epidemic It has a huge impact on the use of office space. This makes forecasting demand for office space difficult.
shopping center market
Mr. Teerawit added that “In the past 20 years, the shopping center market in the Central Retail District (CRD) area, ie Siam Square, Ratchaprasong and Phrom Phong, has been affected by many events, especially the unrest. political calm economy and epidemic which can be divided into 3 main periods: the first period, during the year 2001-2004, is the period of growth from economic confidence that has begun to return. With an accumulated supply of approximately 250,000 square meters, but the chain impact from the 1997 financial crisis caused foreign capital to gradually withdraw capital. Many department stores have been closed. including the World Trade Center or currently Central World. The 2003 SARS epidemic, the H1N1 epidemic and the 2004 tsunami caused the market to shrink.
Then enter the second phase between 2005 and 2010 when the economy is recovering and tourists come in as important purchasing power as well. during that time There are two large shopping centers, namely Siam Paragon and Central World. As a result, the cumulative supply of approximately 550,000 square meters, more than doubled from the first period. and protests in Ratchaprasong area A shopping center in the area was damaged. causing some areas to be closed for repairs Subsequently, it enters the third phase, which is between 2011 and 2021, with new supply to fill the market more, such as Central Embassy Shopping Center. and EmQuartier until the market slowed down again due to many factors including a decrease in the number of Chinese tourists from the boat sinking in Phuket in 2018 and continuing with the spread of COVID-19 As a result, the number of tourists is 0 and shopping centers must be closed to prevent the spread of the epidemic. At the end of 2021, the total supply was approximately 635,000 square meters, an increase of 2.5 times from 2001.
“The shopping center market has always had a good occupancy rate. It has remained stable at around 93-97% over 20 years, even with new supply gradually entering the market. however The long-running situation of COVID-19 As a result, the shopping center was greatly affected. both orders to close shopping centers temporarily The purchasing power in the country is shrinking. and no purchasing power from tourists As a result, the occupancy rate has dropped to 91% at the end of 2021, which is the lowest in 20 years.”
“In terms of rental prices, the G floor has more than doubled from 1,700 baht/square meter/month in 2001 to 3,500 baht/square meter/month in 2021 when comparing the rental increase in each period. It was found that during the first period, the rental growth rate was the highest at about 10% per year, then new supply gradually entered the market. causing higher competition As a result, rental rates increased at an average rate of 4 – 5% per annum in the second period and the market returned to expand well in the beginning of the third period until the market was affected by the economic slowdown. go down including the events of the COVID-19 outbreak causing shopping centers to heal shops by reducing service fees including many stores unable to operate need to leave the shopping center causing shopping centers to find new tenants to replace the existing tenants But the event was still in an unusual state. causing shopping centers to reduce rent to attract new tenants As a result, the rental growth rate is reduced to just 2% per year.”
“By the COVID-19 outbreak Affects users in shopping centers greatly. including online platforms that play an important role in today’s shopping make shopping centers Must adapt to the sudden changes. However, Nexus still looks at the shopping center market. It continues to expand in the future if economic confidence In addition, in the future, there will be new supply from Emsphere and the Central Embassy extension to add more color to the market,” Mr. Thirawit concluded.
