Bangkok city condo prices set to rise
With land prices expected to be reappraised upwards by an average of 25 percent, analysts are suggesting condominium prices in Bangkok will rise by at least 10 percent during 2016.
Of course, while this is a generalization, the prices of condos will vary depending on the location and the quality of the build. Naturally, the more prime the location, the greater the rise will be in condo prices.
Land costs currently account for between 25 and 30 percent of development outlays, up from 20 percent some years ago. This is due to the incredible rise in land prices in the capital, up 15 percent this year already on average from last year. In some city areas the cost of development is the equivalent of 40 percent of funds allocated.
In the Chidlom area a new record land price of 1.91 million baht per square wah was recently recorded.
In the central city, new condo prices have risen an average of 12 percent to around 155,000 baht per square metre. Prices have also risen on the fringes, wherever new mass transit lines are under construction. In these outer areas the price per square metre is around the 85,000 baht mark.
Despite the soaring price hikes, the first half of this year saw 44 new condo project launches in Bangkok, comprising 20,052 units all up. This was a 21 percent decline from the second half of last year. Which had 56 new projects and 22,491 units.
Nonetheless, average prices are up by 35 percent and sell-through rates are a healthy 61 percent. These sorts of figures are expected to show through for the remainder of this year.
Units priced between 100,000 and 200,000 baht per square metre are the current top performers, with sell-through rates of around 84 percent. Those priced above the 200,000 baht per square metre mark are next best, with sell-through rates of 60 percent, while the weakest performers are those at 100,000 baht or less per square metre. These condo developments are showing just 49 percent sell-through rates.
The figures suggest that condo buyers are an incredibly discerning market and will pay for what they perceive to be quality built projects in sought-after areas.
The biggest drivers of prices is location nearby BTS and MRT stations and along areas where new mass transit terminals are being constructed.
The most sought-after areas appear to be the mid-town zones like Phra Khanong-On Nut, Ratchadaphisek-Lat Phrao and Chatuchak-Bang Sue while Bang Na, Thon Buri and Don Muang-Min Buri currently languish behind.