The focus of residential property buying and investing activity in Bangkok is shifting away from the central business district, according to real estate firm that noted the trend in its Q4 Bangkok Property Times research report.
It noted how the residential sector began 2014 poorly, with political unrest causing most developers to delay their launches. There was only one condominium launch in the CBD during quarter one and this slow delivery continued into quarter two.
DTZ noted that it was not until H2 that the number of launches hit a more positive note with approximately 1,830 new units launched in quarter three..
The changing political landscape in Bangkok has made investors and individuals think more strategically about where they buy condominiums. In turn, this has meant that developers are keener to launch projects outside of downtown areas, it noted.
In 2014, the Thai government approved more mass transit lines and this has helped to move demand to areas outside of the CBD. The sizes of units also continued to decrease with one-bedroom condos, which are more affordable for the middle class buyers, proving popular.
The average price for condominiums in fringe locations increased steadily throughout the year and this is set to continue into 2015, DTZ predicted, as demand continues to shift location.
There were eight new condominium projects launched in Q4 2014 with a total of 1,733 units according to DTZ. During 2015, it is expected that demand will continue to shift to less central locations. Notwithstanding this, demand for top quality projects with superb locations and superior specifications remain of interest and developers continue to be able to sell 100 percent of their development prior to launching.
Luxury condominium sales in Bangkok are expected to grow by THB20 billion during 2015, in large because of foreign demand. Condominiums in Bangkok continue to interest foreign buyers, as they are still relatively cheap on a regional basis, and it is estimated that foreigners account for approximately 20 percent of project sales in Bangkok.
A large proportion of foreign buyers originate from Hong Kong and Singapore, DTZ reported, but China and Japan also account for a large percentage of condominium sales. The trend for less European buyers continues with buyers from Britain and Germany both amounting to less than 10 percent combined.
Resales for CBD condominiums are expected to increase healthily in 2015, with prices increasing to 3 percent quarter-on-quarter in the fourth quarter, and almost 5 percent for the year. This was in part because of the lack of activity earlier in the year and resale condominiums proving a more affordable option for a lot of buyers, DTZ noted.
Land prices in 2015 in Bangkok are expected to continue to rise but at an abated pace of approximately between 5 percent and 10 percent. This will in turn continue to increase average condominium average prices.
The fundamentals of the residential market in Bangkok continue to make this an interesting sector for both national and foreign buyers and in light of this; we expect this sector to maintain its resilient outlook in the medium to long term, the agency concluded.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email firstname.lastname@example.org