The residential real estate market in Bangkok has effectively split into two markets – a downtown larger unit market and a one-bedroom market mainly in the midtown area – according to a recently released report by CBRE.
The total supply of downtown Bangkok condominiums increased 0.9 per cent quarter-on-quarter and 12 per cent year-on-year with the addition of 606 units from 5 projects in the second quarter of 2010.
The average asking price for a high-end off-plan condo unit in downtown Bangkok in the quarter was THB 156,813 (US$5,086) per sq m, an increase of 0.2% quarter-on-quarter and 8.6 % year-on-year. The average re-sale price of completed high-end units increased 11% year-on-year. The report said that although the civil unrest and April and May slowed the launch of new projects, prices have not fallen and there have been few panic sales.
The majority of upcoming launches will be one-bedroom projects in downtown, midtown, and suburban areas, with few launches of two-and three-bedroom projects as developers continue to try and clear the surplus inventory of this type with sales and promotions, the report concluded.
The two property markets have performed very differently in Bangkok
The two markets have performed very differently. The larger unit market with prices over THB10 million (US$324,359) has languished with very few new launches. Unsold units have been building up, but developers are having some success making sales by offering incentives like “guaranteed yields” and furniture packages. The market for smaller units has fared better with mainly Thai buyers fuelling sales.
The report said that although the civil unrest and April and May slowed the launch of new projects, prices have not fallen and there have been few panic sales. The majority of upcoming launches will be one-bedroom projects in downtown, midtown, and suburban areas, with few launches of two-and three-bedroom projects as developers continue to try and clear the surplus inventory of this type with sales and promotions, the report concluded.
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CBRE: Bangkok residential market has split in two
Thailand Real Estate Outlook
Despite the stronger baht, foreign demand for luxury condominiums is picking up and will return to previous levels in the fourth quarter, says Aliwassa Pathnadabutr, the managing director of property consultant CB Richard Ellis (Thailand).
She said the walk-in rate by foreigners at projects represented by her company had risen since June after dropping in April and May during the political turmoil.
In May, only 93 potential foreign customers visited CBRE’s project sites, increasing to 153, 167 and 172 in June, July and August, respectively.
For Thai customers, 222 visited the sites in May, rebounding to 341, 356 and 287 in June, July and August.
The return of foreigners, mostly investors and other buyers from the Asia-Pacific and Europe, has boosted confidence that foreign demand will return to pre-crisis levels by year-end.
From January-August, the ratio for Thai versus foreign high-end condominium buyers was 86:14 against 84:16 for all of last year and 70:30 in 2008.
The company expects foreigners to account for 20-25% of buyers by year-end thanks to the global economic recovery. Foreigners see the medium- to long-term growth potential of the Thai economy and property market.
Prices of luxury condos in Thailand remain reasonable compared with elsewhere where prices are reaching their peak. Currently in Bangkok, they are priced from 120,000-300,000 baht a square metre, said Ms Aliwassa.
Foreigners are interested in familiar locations like the central business district comprising the Wireless, Silom, Sathon, Lang Suan and Sukhumvit areas. They consider one-bedroom units from 90-100 square metres and priced at 120,000 baht per sq m to be affordable.
Foreign demand for luxury condos back
17/09/2010 : Despite the stronger baht, foreign demand for luxury condominiums is picking up and will return to previous levels in the fourth quarter, says Aliwassa Pathnadabutr, the managing director of property consultant CB Richard Ellis (Thailand).
