Bangkok’s condo market appreciating 12 percent per annum
Sena Development Plc, a SET-listed developer, recently released figures which show condo prices in the greater Bangkok area have surged at 11.75 percent per annum since 2009, or 47 percent over the last four years. In the same period the prices of townhouses have risen by 36 percent and single houses by 25 percent.
The executive director of Sena Development, Kessara Thanyalakpark, said there are six locations where condo price rises had been significant, including Laksi-Ram Intra, Bang sue-Nonthaburi, Lat Phrao-Makkasan, On Nut-Bearing, Bang Na-Suvarnabhumi, and Taksin-Bang Wa. Not surprisingly, most of these areas are along MRT, BTS, or the SRT rail link to airport lines.
Prices in these locations have risen from an average of 68,000 baht per square metre in 2009 to 100,000 baht per square metre this year, a substantial growth of 47 percent. In fact, the growth spurt has been so strong that land costs are now so high that so-called affordable condo complexes are no longer feasible to develop. This may explain why so many developers are now looking more and more at moving into places like Pattaya and along the Eastern Seaboard and down towards Hua Hin and Chumphon.
Khun Kessara said the prime areas of growth in the single house and townhouse markets were Khlong-Wa-Thanyaburi-Lam Luk Ka, Min Buri-Nong Chok-Lat Krabang, Bang Phli-Muang Samut Prakan, Rat Burana-Bang Khunthian-Chom Thong, and Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi.
The average price of a single house has risen from 4.72 million baht in 2009 to 5.91 million this year, a 25 percent jump. In the meantime, townhouse have jumped to an average of 2.25 million baht, up from 1.66 million baht in 2009.
Despite the positives, there are those who feel the next few years will not see anything similar in terms of price/value rises. Samma Kitsin, the director-general of the Real Estate Information Center, claims 2014 will see a slowdown as developers reduce the number of projects they undertake. He suggested that in some areas the supply of condos has reached a point of surplus with greater competition and slowing sales.
He also believes there are other negative factors on the horizon, not the least being a skilled labour shortage, as well as the high number of condos already released in 2013, which number between 70,000 and up to 75,000 units across greater Bangkok.
Khun Kessara noted however that despite the negatives which have hit markets over the years, house and condo prices have never gone down. She suggests they have always risen, depending on the type and location.