A bridge that connects two high-rise condominiums is seen damaged, following a strong earthquake, in Bangkok, Thailand, on Saturday. (Photo: Reuters)

A condominium glut in Bangkok is set to worsen after a deadly earthquake in neighbouring Myanmar damaged thousands of skyscrapers in the Thai capital, spooking prospective buyers.

The 7.7-magnitude earthquake, which killed more than 2,700 people in Myanmar, led to the collapse of an under-construction office tower in Bangkok. Authorities have also reported varying degrees of damages to about 13,000 buildings, leading to mass evacuations and safety checks.

The quake, the strongest to hit Myanmar in a century, has shaken the confidence of prospective home buyers, especially those weighing condominiums, according to real estate consultants including Colliers Thailand. That will hurt condo sales in the short term, exacerbating an oversupply in the segment in Bangkok and its suburbs, they said.

"The earthquake presents a serious challenge to Bangkok’s condominium sector, particularly as the market is already burdened by high unsold inventory" said Phattarachai Taweewong, the Research and Communication Director at Colliers Thailand.

Property developers in the greater Bangkok area were saddled with about 235,000 unsold residential units at the end of last year, the most since data dating back to 2018. Sales slumped 37% to about 53,000 units in 2024, according to the Thai Condominium Association.

"We've seen some condo buyers temporarily pause their search," said Pierre Lung, sales director at real estate platform PropertyScout. "A number of buyers are now more hesitant when it comes to high-rise buildings, especially new projects."

Thailand's real estate sector was hit hard during the coronavirus 2019 (Covid-19) pandemic, and a raft of government incentives and tax breaks to support the sector in Southeast Asia’s second-biggest economy have failed to revive its fortunes. 

The Bank of Thailand (BoT) last month relaxed the loan-to-value ratio for mortgages to allow banks to lend more to the buyers, who are battling one of the highest household debt levels in Asia.

Now the fallout of the quake is likely to impact condo demand over the next three to six months, Kiatnakin Phatra Securities said. High-rise condominiums will face added inspection and repair costs, particularly affecting developers with high exposure to condos, such as Ananda Development Pcl and Origin Property Pcl, the brokerage said in a report this week.

In the meantime, top Thai developers such as Sansiri Pcl have launched a publicity blitz on social media to restore confidence in the safety of their buildings.

Uthai Uthaisangsuk, chief executive officer of Sansiri, said in a video message that more than half of its 250 residential projects had been inspected, and the firm had discovered no major structural damage. Other developers have made similar safety assurances about their properties.

While developers with high exposure to condominiums in their portfolio will be hit harder, few smaller ones which cater to landed homes might even benefit as buyers shift preferences to such houses, according to analysts.

The condominium association sees any impact from the earthquake on demand to be short-lived as there were no major structural damages to the residential towers and no fatalities.

"There were some jitters with the cracks and material falls," especially in high-rise condominiums, said Prasert Taedullayasatit, president of the association. "Quick actions by most developers and lack of fatalities from condominium collapse should offer some confidence about the structure and construction quality of those properties."

A measure of property developers fell 3.1% on Monday before paring some of the losses in the following session. Still, the property index has dropped about 32% over the past year, more than the 15% decline in the benchmark SET index during the same period.

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