Bangkok's condominium market remains bright
Bangkok's condominium market remains bright, driven by rail expansions and an increasing focus on convenience among buyers, says Knight Frank Thailand Research.
In 2017, 62,751 new units entered the market, an increase from 19% in 2016, said the property consultant firm.
The average annual total sales rate was about 76%, reflecting growth from the 74% seen in 2016. The most popular locations continue to be around the Light Green Line (Sukhumvit) and the MRT Blue Line.
As for the central business district (CBD), Sukhumvit remains the most popular area, with about 11,000 new units coming into the market; this was followed by Wireless Road, Silom and Sathon with 2,300 units, and Rama IV with 817 units.
Beyond the CBD, real estate development companies focused their attention on Rama IX-Ratchadaphisek, Phahon Yothin, Lat Phrao and On Nut-Bearing, with 19,000 new units entering the market.
In 2017, the CBD and surrounding areas experienced average sales rates of 78% and 71%, respectively, while new suburban projects averaged an annual sales rate of 80%.
This serves as a good indicator of consumer confidence in the market, the consultancy said. The selling price per square metre rose in all segments, particularly the CBD, which has limited plots of land suitable for the development of new projects.
As a result, land prices soared, which is reflected in the sale prices. New projects in the CBD commanded average sales price of 248,267 baht per square metre, while the area around the CBD was priced at 131,521 baht per sq m, and new projects in the suburbs averaged 79,871 baht per sq m, increasing from 2016 by 8.6%, 1.2% and 6.5%, respectively.
For the first quarter this year, there were 12,563 new condominiums entering the market, and new units enjoyed sales of 55%. Over half of them were launched in March 2018.
The average selling price per sq m in the CBD and surrounding areas clearly contracted from the same period of last year. This is because projects launched this quarter are located in less prominent areas, with lower grade specifications.
But the average sales price of a new unit in the suburbs grew to a record-high 110,353 baht per sq m, up 61% compared with the first quarter of 2017 and up 38% from the entire year.
Scarcity of land in the city is a factor, coupled with steadily rising land prices. Many operators are also increasingly turning their attention towards peripheral areas.
In this quarter, one project had an offering price of more than 110,000 baht per sq m. With six projects launched in the suburbs, the average selling price per square metre was pushed higher than previous years.
This year, the market outlook for suburban areas and around the CBD sees both locales with opportunities for growth, according to Knight Frank, especially for projects near mass transit train lines or no farther than one kilometre from the lines.
Such areas should continue to receive heightened attention from large and mid-scale property developers.