Bangkok housing sector tipped for 7% growth
BANGKOK’S residential property market will see growth of up to 7 per cent in 2018 from this year, thanks to the government’s proposed expansion of investment for infrastructure projects, property agencies said.
Knight Frank Thailand Co Ltd’s managing director Phanom Kanjanathiemthao said that the capital’s residential property market would be among those segments set to experience the most growth, in the range of 5 to 7 per cent in terms of the number of units and project value.
This corresponds with the views of major project developers who, on the whole, continue to view the market as one with growth opportunities.
As such, their plans to propel their businesses reflect the residential market's potential. At the same time, their offerings and products next year should remain the same, without major changes in room layout or unit sizes; developers will instead look to enhancing project facilities in order to differentiate themselves and help boost sales. In general, projects will include features like automated parking, which can add 20 to 30 per cent to their capacity, compared to the old parking systems; and home automation systems.
The development of residential projects next year will continue to focus on areas accessible by the train network, especially the Orange Line, the Blue Line, and the extension of the Green Line that is in progress. The market will expand to the outskirts of Bangkok, with the trains making it convenient for people to travel into the city as well as to anticipate their approximate travel times.
As for the single home and townhouse market in the outskirts of the city, the outlook is that the rate of expansion will be low, with traffic issues accounting for the main factor hampering growth. Also, single home and townhouse projects are generally far from the train lines. There are very few plans to build new roads to accommodate the number of cars and ease traffic issues. The condominium market thus has an advantage to being close to the train lines; moreover, they don't require huge plots of land for development.
The market for B-C grade condos will remain largely comprised of Thai buyers. Condos in the Sukhumvit area, serviced by the Green Line – Baring trains and the subway from Bangsue – Ladprao, will attract more foreign investors such as those from mainland China, Hong Kong, Malaysia, Singapore, and Taiwan. Investors from other countries also exist but in small numbers. The factors that encourage target buyers to make their purchasing decisions vary from market to market.
Location viewed as priority
For the condominium market, buyers will first and foremost consider the location, with the ability |to travel easily into the city as an important factor. Also, they will look at the development, unit size, facilities and amenities, and pricing.
For the single house and townhouse market, buyers will first consider the usable space, followed by facilities and amenities in the development, and location, property agency said.
Meanwhile, the townhome market in Bangkok and Greater Bangkok – including Krathum Ban-Sam Phran, Thung Khru-Phra Pradaeng, Thon Buri-Rat Burana, Lat Lum Kaew, Don Mueang-Sai Mai, On Nut-Bang Na and Suvarnabhumi-Bang Sao Thong – will see current pricing continuing to attract buyers, according to a survey by Plus Property Co Ltd, a property agency and management arm of Sansiri Plc.
The company’s managing director Anukul Ratpitaksanti said that prices in these seven areas range between Bt1.2 and Bt2.99 million, and these development projects have been warmly received because of transportation linkages into Bangkok. Analysis deemed that offer prices (Bt1.2-Bt2.99 million) were not high for all of the locales, whereas offer prices in the Krathum Ban-Sam Phran area start lower than Bt1.2 million.
“Results from our surveys point to a return of purchasing power for the town house category. Demand and supply continued to grow healthily in 2017 although there were no specific policies to stimulate the real estate sector,” Anukul said.
“We expect the market for townhomes to continue growing in 2018 because offer prices have yet to rise significantly, and the prices match the purchasing power of locals in the suburbs. Consumer confidence is also expected to grow in the same direction as the continually improving economy in 2017, and this momentum is expected to carry over to 2018.”