Bangkok’s Condo Market Remains Buoyant
While the general economic slump continues to have a negative impact on Thailand in general, the Bangkok condominium marketplace continues to buck the trend, according to the latest figures available.
Demand from affluent buyers remains strong, with high-end condos located in prime positions and built by long-standing, reputable developers selling out very quickly. This is especially noticeable where the average selling price is 150,000 baht or more per square metre, putting the condos in what are considered to be the super-luxury market. Prices among this elite level are also continuing to rise.
According to figures released by the real estate-focussed Knight Frank Chartered (Thailand) Company, Bangkok’s condo supply at the end of June this year totalled 362,697 units, which represents an increase of 4.2 percent from the first quarter of 2015 and a substantial 23.9 percent increase from the same time a year ago.
Notably, the take-up rate has grown from 84 percent at the end of 2014 to 85.3 percent by June this year, with 309,388 of the 362,697 units sold.
Knight Frank noted that just in the second quarter of this year 37 new projects were launched, with 73 percent of these in what is termed the peripheral area of Bangkok. Only six percent (or the equivalent of a mere 1,242 units) of the new projects were launched in the city area, but this is primarily due to the scarcity and cost of land. Naturally enough, these city area units are classified as Grade A, and the price tag is substantial.
Not surprisingly, the central business district (CBD) area has seen prices rise at much faster rates than anywhere else, simply because of the lack of available land. Some super-luxury units have opening prices at 250,000 baht per square metre. These include such new places at Q Sukhumvit, Tela Thonglor, Nimit Langsuan and Four Seasons Private Residence.
The average price per square metre in the CBD is 212,588 baht, an 18.5 percent increase on a year ago.
Where new developments are taking shape on the city fringe, with access to the increasingly popular mass transit facilities, the trend is also towards upper-market projects designed to justify the higher costs of land. Indeed, of seven condo projects in the city fringe area, five were classified as Grade A.
As Knight Frank observes, rising prices are not really due to buy and sell demand, but more due to the rising costs of property located near mass-transit routes.
The average price of city fringe condo units is 127,578 baht per square metre, and this represents a 15.6 percent jump from 2014.
Nonetheless, Knight Franck suggests one area of concern is peripheral Bangkok where a number of recently-launched projects it believes are over-priced in relation to comparable units situated within the city fringe area, where access to mass-transit facilities is much easier.