Condominiums in the Sanam Pao-Ari-Saphan Khwai area remain in demand, with resale prices rising robustly thanks to limited land for property development, increasing land prices, high residential density, convenient transport and proximity to government agencies, says real estate consultant Plus Property Co.
Deputy managing director Anukul Ratpitaksanti said condominium resales in the Sanam Pao-Ari-Saphan Khwai area have increased by 50-60% over the past 5-6 years due to high residential density.
The area is popular with varying social groups -- from affluent individuals who have inherited wealth and civil servants to private sector employees and students because of the proximity to main skytrain routes.
A Plus Property survey conducted in the first half of the year found that there was a supply of 2,184 condominium units, of which up to 91% have been sold, with an average of 12 units being sold per month.
It also found that there are only nine high-rise condominium units available from three projects near skytrain routes, and they are being sold at an average price of 160,000 baht per square metre.
Meanwhile, there are 197 low-rise condominium units, from 12 available projects being sold at an average price of 102,000 baht per sq m. This shows that the area is consistently demanded by consumers, especially high-rise condominiums near skytrain routes.
In the second half of the year, there will be 1,371 condominium units from two new projects entering the market, with average opening prices of 160,000-170,000 baht per sq m.
The high prices have contributed to demand expanding for condominiums located on secondary roads or a small distance in side streets, which can still be considered as near skytrain stations.
Condominiums in the Sanam Pao-Ari-Saphan Khwai area face unwavering demand due to their locations near convenient transport routes, including being near Pradipat intersection, which links Rama VI, Phahon Yothin Road, Vibhavadi Rangsit, Ratchadaphisek and Lat Phrao roads.
The area is also near schools, universities, Chatuchak market, department stores, hotels, government agencies and offices.
However, there has been limited development of residential projects in the area due to a saturation of commercial buildings along both sides of the road.
Accumulating sufficient land for a new condominium project is difficult. The area contains many old communities. When a new project development does occur, residents of these communities often quickly purchase the properties as long-term investments. Well-located projects in the area often sell out quickly.
In addition, a review of the opening prices of high-rise condominiums in the Sanam Pao-Ari-Saphan Khwai area 5-6 years ago found average prices were 90,000-100,000 baht per sq m.
At present, average resale prices have increased to 140,000-150,000 baht per sq m. Resold property will provide returns of 50-60%. The area also has a high residential density rate of 80-90% and often attract significant renter interest.
Condominium supplies in this area are rented at an average price of 570 baht per sq m, with the rent for a 30 sq m units at 17,000 baht per month, and average return on investment at 5-7% per year. A one-bedroom, 30 sq m unit is the most in demand, with average rental prices of 17,000-18,000 baht per unit per month. A two-bedroom, 65 sq m unit has an average price of about 35,000 baht per unit per month.
"The price of land near Sanam Pao-Ari-Saphan Khwai skytrain stations during the past five years has increased an average of 5-25% per year," Mr Anukul said. "There are ongoing megaprojects, such as the Bang Sue interchange station. Once these projects are completed and operational, there is a very high possibility that prices in the area will increase even further.
"It is certain the capital investment needed for new project development in the area will increase, whether from land prices, building materials, or labour costs. New condominium prices in the Sanam Pao-Ari-Saphan Khwai area are likely to increase to 150,000-200,000 baht per sq m. Condominiums in this area are highly suitable for long-term investments."