Luxury end of Bangkok market least affected by economic, political woes
June 20, 2014 00:00
By Somluck Srimalee
As far as the residential sector is concerned, the country's political and economic problems have had the least impact on the luxury end of the market in Bangkok, where supply is lower than demand, according to property experts.
Aliwassa Pathnadabutr, managing director of CBRE Thailand, said that in the final quarter of last year, four new condominium projects were officially launched and represented by her company, with a total of 1,369 units offered for sale.
They have each sold between 90 per cent and 100 per cent of their sales value, which totals more than Bt8 billion across the four projects.
One of the key factors leading to the successful sales performance despite the overall market slowdown is the developers’ in-depth understanding of their target markets, which led them to create and offer products that matched high-end buyers’ requirements, she said.
In today’s competitive market, developers creating a high-end or luxury product need to match customers’ requirements, especially in terms of unit size, lay-out, quality of specifications, and building architecture, as well as decorative style, she said, adding that CBRE Thailand believes there is still room for innovation in new product development.
Aliwassa also said most luxury condominium projects required down payments of as high as 30 per cent, resulting in a limited number of speculators chasing the units on offer. While some buyers may sell their units for capital gain, most either are long-term investors or treat the units as assets for their children.
Moreover, high-quality projects are mostly situated in good locations, where prices will not fall. For instance, a number of completed condominium developments located on the main Sukhumvit Road were sold at 20 per cent higher than the launch prices, she explained.
Following the strong demand for luxury residences, CBRE Thailand will launch another six condominium projects for developers in the second half of the year, with a combined value of about Bt11 billion.
They comprise a resort condo and villa project in Khao Yai, located on Phansuek-Kudkla Road; a freehold condominium project on Langsuan Road; a luxury Bangkok riverside condominium project; a luxury detached-housing project in downtown Bangkok; and low-rise luxury condominium projects on Sukhumvit 55 and Nanglinchee roads.
Registration for these new projects opens this month, said the MD.
Meanwhile, a survey by Jones Lang Lasalle has found that almost 3,500 high-end condominium units are expected to complete by year-end, and that 80 per cent of them are already sold.
Rutt Phanijphand, president and CEO of luxury developer Quality Houses, said demand at the luxury end of the market was continuing to grow despite the economic slowdown because of limited supply, especially in locations suited to high-end residential development.
“We have decided to buy land on Sukhumvit at Bt1.8 million per square wah [4 square metres] in order to develop a luxury condominium, because we see [continuing] demand at this time,” he said.