Demand for high-priced low-rise houses continued to grow for two consecutive quarters, with market value in the third quarter soaring by 58% from the second, while developers launched new supply in this segment.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said low-rise houses priced 20 million baht and higher posted significant growth this year.
“High-end homebuyers preferred low-rise houses to condos after the pandemic. As demand continued to be robust throughout the economic slowdown, developers shifted to this segment,” he said.
As low-rise houses priced 20 million baht and higher had a promising outlook this year, REIC began conducting a survey on this price range in the first quarter, up from a range of 10 million baht and higher earlier.
The number of newly launched low-rise houses priced 20 million baht and higher rose from 115 units worth 4.1 billion baht in the first quarter to 523 units worth 31.2 billion baht and 954 units worth 39.8 billion baht in the second and third quarters, respectively.
New sales in this segment were healthy, with 466 units worth 15.6 billion baht, 343 units worth 15.7 billion baht, and 535 units worth 24.9 billion baht in the three quarters respectively.
Chotika Tungsirisurp, head of research and consulting at CBRE Thailand, said developers increased launches of luxury single detached houses during the past six years to meet the changing needs of families.
“Despite two years of the pandemic and growing new supply in the luxury segment, its sales performance remained strong at 69% in the third quarter, even higher than pre-pandemic period,” she said.
Between 2017 and 2019, developers launched a total of 785 luxury housing units in Bangkok. They launched 800 more units in 2020-21 and 883 units in the first nine months of 2022.
According to REIC, new condo supply priced 20 million baht and higher per unit launched in Bangkok totalled only 64 units worth 3.7 billion baht in the first nine months of 2022.
New sales tallied 424 units worth 20.2 billion baht.
The monthly absorption rate of low-rise houses and condo units in this segment in the first three quarters was 6.5%, 4.6% and 5.4%, respectively, higher than the market average of 5%, 3.9% and 3.4%, respectively, said REIC.
Mr Vichai said new residential supply launched in Greater Bangkok in the third quarter dropped consecutively for units from the first and second quarters, but grew in terms of value.
This suggests the majority of new supply was in the high-priced segment, he said.
The number of new supply launched totalled 29,299 units worth 106 billion baht in the first quarter, 28,492 units worth 137 billion in the second quarter, and 24,112 units worth 147 billion in the third quarter.
The key driver of quarterly value growth was low-rise houses as the sector saw an increase in both number and value, from 10,455 units worth 59 billion baht in the first quarter to 12,180 units worth 92 billion baht in the second and 16,586 units worth 127.6 billion baht in the third, said REIC.