Developers have increased launches of condominiums; many of which have been funded by new joint ventures, primarily with Japanese partners. Sales to Thai buyers have slowed in some locations and are likely to slow further with the coming imposition of tighter mortgage lending. Some developers are trying to find locations where there is real demand from Thai end-users and develop projects that buyers can afford. Others have increased their reliance on foreign sales where there is uncertainty as to who will be the final occupier.
At the end of Q3 2018, the total office supply in Bangkok totaled 8.8 million square metres. The overall vacancy rate increased from 6.8% in the previous quarter to 7.1% in Q3 2018. The overall net take-up (growth in total occupied space) was around 32,000 square metres, dropping by 27.1% Q-o-Q and by 31.6% Y-o-Y.
There were 9.1 million tourist arrivals in Q3, increasing by 3.2% Y-o-Y. Chinese tourist arrivals fell by 8.8% Y-o-Y at 2.4 million arrivals compared to 2.7 million arrivals in the same period last year due to the tragic boat incident in Phuket. Part of the growth in arrivals was due to a 40.5% jump in Malaysian arrivals which we think had no effect on the Bangkok market as many of these visits were short cross border trips.