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Raimon Land Research Reveals recovery of the Bangkok upscale condominium market

Interestingly, domestic buyers represented over 90% of sales during that period while foreigners represented only 8.8% of sales, showing that the political upheaval has upset the international investment market more than Thai buyers.

Olivier Languepin

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Luxury property developer Raimon Land has released Condominium Focus Bangkok Update, its first quarterly research publication of the year. The document reveals a remarkable recovery of the Bangkok upscale condominium market despite the ongoing domestic political tensions.

The fourth quarter of 2009 saw the Thai economy post 5.8% GDP growth, due primarily to exports to Asian markets bouncing back, leading to developers releasing more projects and local buyers queuing up to purchase them as confidence has streamed back into the industry.

The latest edition of Condominium Focus Bangkok Update, available as a free download at www.raimonland.com, explains that projects launched by listed developers received an upbeat response with condominium presales totaling THB 15.1 billion in Q4 2009, an increase of 380% over the same quarter in 2008.

In total, 1,087 condominium units were transferred in Q4 2009 for an average price per square metre of THB 98,551.

Interestingly, domestic buyers represented over 90% of sales during that period while foreigners represented only 8.8% of sales, showing that the political upheaval has upset the international investment market more than Thai buyers.

Raimon Land Deputy Vice President for Research and Development, Simon Dervillé, said the first quarter of 2010 has been active in inner-city Bangkok.

“One of the key findings of our research is that demand from Thai buyers has been remarkably strong with many developers now turning their attention to this target group. At Raimon Land, Thai buyers now represent two-thirds of our sales, gaining significant ground over the foreign demand that was prominent over the past two years,” said Mr Dervillé.

Condominium Focus Bangkok Update is an independently-researched publication on the inner-city Bangkok condominium market, aiming to provide investors and industry observers with accurate insight into supply, completions, off-plan sales and transfers.

The condominium market appears to be recovering, as all major developers reported stronger Q1/09 presales after a dismal Q4/08. Developers are also enjoying lower construction and material costs alongside a selection of reasonably priced, quality land plots in 2009, but banks remain cautious in releasing new loans for condominium projects.
Condominium development indicators for Q1/09 reveal:
  • Presales more than doubled those in Q4/08, signalling the market has already bottomed out
  • Construction costs by gross floor area (GFA) have fallen more than 10% since Q3/08
  • The construction material price index (CMPI) dropped 24% from its July 2008 peak
  • However, the drawdown on new loans tumbled 36.5% to THB1.8 billion from last year’s THB2.9 billion
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