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Published on February 26, 2008

The high-end and luxury markets, which faced a slight slowdown last year, mainly due to low market sentiment, will become more active this year.

Last year, the main focus in Bangkok's condominium market was in the mid-range market, where projects are located close to the Skytrain or other mass-transit systems. This segment will continue to grow and become more competitive.

Investors are aware that freehold land plots in prime central locations are very limited, and the increase in land prices has resulted in a drop in the new supply of luxury units in these areas, whereas demand for central-city living is growing. Prices of downtown condominiums have continued to rise since the market recovery in 2003 at an average of 10-12 per cent per annum for new projects.

Managing director Aliwassa Pathnadabutr said the company had found that with the rising construction and land costs in central areas, it would be difficult to develop new freehold high-rise condominiums to sell at prices below Bt100,000 a square metre in prime locations like upper Silom, Sathorn, Wireless, Sarasin, Rajdamri and Ploenchit roads and Soi Langsuan, as well as Sukhumvit Road up to Soi 55 (Soi Thonglor). Lumpini Park is seen as the centre of Bangkok's prime central business district (CBD), an area covering a radius of 1 kilometre from the park and one of the most sought-after locations, where good freehold land is scarce.

Prices of newly launched high-end and luxury condominiums in these areas range from Bt100,000 to Bt178,000 a square metre, depending on product and location.

Most of these newly launched projects sold more than 60 per cent of their units last year and include such developments as Hansar Rajdamri. The prices of units at Athenee Residence, a newly completed condominium project on Wireless Road, have appreciated more than 40 per cent in the three years since the project's 2004 launch.

Last December, Sukhothai Residences, developed by HKR International, set a new price record for the Bangkok condominium market by achieving Bt220,000 a square metre for its typical units and Bt343,000 a square metre for one of its penthouses. The project's success in selling more than 90 units, or 50 per cent of the total saleable area, at these record prices in one month indicates demand for luxury properties remains strong from both Thai and foreign buyers.

CB Richard Ellis's research team has recategorised the condominium market in the central area into six different segments by price: the super-luxury segment with prices of more than Bt180,000 per square metre, the luxury segment priced at Bt130,000 to Bt180,000 per square metre, the high-end segment priced at Bt100,000 to Bt130,000 per square metre, the upper-middle segment priced at Bt80,000 to Bt100,000 per square metre, the mid-range segment priced at Bt60,000 to Bt80,000 per square metre and the economy segment priced at less than Bt60,000 per square metre.

The Nation