"The chance of failure for condominium developers in Bangkok has grown to almost 50 per cent as competition heats up amid a glut of fresh supplies, warned Aquarius chief executive Yongyuth Chaipromprasert.
After conducting a study during the past five months, the building consultant said even inner Sukhumvit, an area once deemed immune to downturns, "no longer guarantees success"."The average take-up rate for Bangkok condominiums is now 54 per cent," he said. "That is considerably lower than about 70 per cent for last year." "Of the 50,000 units that are expected to be launched this year, about 46 per cent won't be sold," he deduced from recent statistics.
"One out of every two developments could fail."
"The inventory left over from last year should also add to current stock, making the situation even tougher for sellers, especially newcomers," he said. With 15,000 unsold units from last year and 25,000 units from this year, the market will have an additional 40,000 units to clear in 2009.
Because of the worrying trend, he expected new supplies to fall to 40,000 units next year. Yesterday TCC Land said it was halving the number of new projects from 5 to about 2.
Yongyuth said most of the buyers are in the outer zones where land is cheaper. "If developers can sell units for between Bt1 million and Bt2 million, they should survive. It is the large units which will find difficulty selling with rising inflation and oil prices," he said. . .
Yongyuth said the worst hit would be developers who bought land recently at high prices and were forced to construct at escalated costs."
http://www.nationmultimedia.com/2008/06/10...es_30075134.php
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Failure rate for BKK condo developers could hit 50%
Started by TheYenta, Jun 15 2008 06:34 PM
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