A visitor examines models of houses on display at a housing fair held at the Queen Sirikit National Convention Center in Bangkok. (Photo: Bangkok Post)

Developers in Rayong are adjusting to a market slowdown by reducing the bulk of newly launched residential supply in the first quarter of 2024, in response to consecutive declines in sales.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the Rayong market, predominantly composed of low-rise houses, experienced a decline in sales in the first quarter.

"Despite the drop in sales, there were no trends of oversupply in the market as developers stopped launching new supply after observing the decrease," he said.

From the first quarter of 2023 to the first quarter of 2024, each quarter saw an average of 1,500 new low-rise house sales, including 600 single detached houses, 550 townhouses and 350 twin houses.

However, sales in each quarter recorded a downward trend, particularly for townhouses, prompting developers to slow the launch of new supply.

In the previous quarters, the number of new launches averaged 1,000 units per quarter, mostly single detached houses, similar to the sales figures.

Twin houses and townhouses saw a significant decline in new launches. Consequently, the number of unsold twin houses and townhouses decreased consecutively for five quarters, with a year-on-year drop of 21% in the first quarter of 2024.

According to REIC, the number of launches of new residential supply in the first quarter of 2024 tallied 879, down by 37%, valued at 2.3 billion baht.

All of these were low-rise houses, including single detached houses (51%), twin houses (28.7%) and townhouses (20.3%).

The number of new sales reached 1,314 units, down 27.2%, valued at 3.48 billion baht, with an absorption rate of 4.2% per month.

Condo sales stood at 130 units, falling 37.5%, valued at 367 million baht, with an absorption rate of 4.1%.

Locations with the largest number of condos sold included Muang with 71 units worth 148 million baht and an absorption rate of 4.7%, followed by Nikhom Map Ta Phut (57 units).

"The condo market continued to experience a certain level of demand, but the current supply exceeded the market's absorption capacity," Mr Vichai said. "Developers should pause new launches of condo supply temporarily, allowing the market to gradually absorb the existing inventory."

The launch of new condo supply has been sporadic, with only 1,211 new units launched over the past five quarters. However, total sales during this period were 1,039 units, indicating a downward trend.

With unsold units carrying over from previous years, there were still 920 unsold units remaining, which might take over a year to sell out.

Meanwhile, 1,184 units of low-rise houses were sold, down 26%, valued at 3.12 billion baht with an absorption rate of 4.2% per month.

The top three locations with the largest number of low-rise houses sold were Nikhom Amata City-Eastern with 443 units worth 919 million baht and an absorption rate of 3.9%, followed by Nikhom Hemaraj (352 units) and Nikhom Map Ta Phut (216 units).

As of the end of the first quarter, the number of unsold units tallied 9,235, down 20%, valued at 25.6 billion baht.

Unsold low-rise supply dropped 20% to 8,315 units worth 22.3 billion baht. They comprised 3,354 units worth 6.9 billion baht in Nikhom Amata City-Eastern, 1,998 units worth 4.5 billion baht in Nikhom Hemaraj, and 1,885 units worth 6.3 billion baht in Nikhom Map Ta Phut.

"Rayong's residential market in the first quarter showed how developers swiftly adjusted to the situation by holding back new launches, which resulted in a decrease in unsold inventory," Mr Vichai added.