Condominiums with selling prices higher than 250,000 baht per square metre started to emerge in Bangkok in 2015. Most of these luxury developments were located along BTS lines, while a few had other selling points, such as locations on the Chao Phraya River or close to Lumpini Park.
The most fashionable locations for buildings at the top end of the price range are along Sukhumvit Road from the Nana to Thong Lor BTS stations. High land prices resulting from the dwindling supply of prime sites are reflected in unit selling prices. Out of the 8,481 units priced from 250,000 baht per sq m and launched since 2015, 40% are along Sukhumvit.
Launches of high-end condos reached a record 3,700 last year, and another 1,400 units priced above 250,000 baht per sq m were announced in the first half of this year.
However, developers are starting to carefully monitor demand as the number of prospective buyers at the high end of the market is limited. They continue to focus on locations near BTS stations, especially between Chidlom and Thong Lor, where the best land plots now fetch between 1.5 million and 2 million baht per square wah.
Twenty-one projects with a total of 4,296 units priced above 250,000 baht per sq m are scheduled to be completed in the next two years: 2,752 units this year and 1,544 in 2019.
Luxury condos are a small niche in the total market, which is expected to total about 55,000 units in Greater Bangkok this year, with an average selling price of just over 109,000 baht per sq m in the second quarter.
The main concern of all developers of luxury units is buyers, mostly local, who cannot complete the transfer of their units because they have been turned down for mortgage loans. Some foreign buyers, meanwhile, end up not transferring units as they originally bought for speculation.
With so many units now under construction and scheduled for completion between 2020 and 2024, transfer rates will be watched closely, especially since take-up rates for high-end units are lower than for other condos. The pace of project launches might slow as a result.
Surachet Kongcheep is a veteran local property market expert. He can be reached at surachet.jock@gmail.com