Luxury condo sales in Bangkok are expected to grow by 25% to 20 billion baht next year on the back of increased foreign demand, says consultant CBRE Thailand.
High-rise condos in Bangkok’s central business district are attracting strong demand, especially from foreign buyers, a study says. SEKSAN ROJJANAMETAKUN
Managing director Aliwassa Pathnadabutr said luxury condo sales slowed in the first half of the year but had picked up since the third quarter, driven by foreigners who resumed purchases and investment after seeing a calming of Thai politics.
Better sentiment among foreign buyers was seen last month at a two-day roadshow in Hong Kong where CBRE sold 12 units at Magnolias Waterfront Residences at Iconsiam worth a combined 400 million baht.
Ms Aliwassa said foreign buyers accounted for 18% of CBRE project sales in Bangkok in the third quarter, compared with none in the first half, down from 22% in 2013.
Buyers from Hong Kong, Taiwanese and Singaporean each accounted for 10% of sales. They were followed by buyers from mainland China and Japan (9% each), Germany (7%), Malaysia, Australia and Britain (6% each) and others (27%).
"The sluggish economy has less impact on super luxury and luxury condo demand than confidence has. We expect sales from foreign buyers to account for more than 20% of the total next year, as seen from the growth of expat numbers in the second half," Ms Aliwassa said.
In 2015, CBRE will manage sales at nine new condo projects worth more than 23 billion baht and expects to record 20 billion baht in sales.
More than half will be luxury condos in the inner city including two projects in Lang Suan Road-Sarasin Road, two in Thong Lor and others near Siam Square and on Sukhumvit Soi 31.
The Posh 12 worth 4.6 billion baht, near the Purple Line's Ministry of Public Health station, is a condo development by Singaporean fund Pacific Star, which had frozen Thai property investment since 2008.
In the first 11 months of this year, CBRE recorded 14.35 billion baht in luxury condo sales from 1,644 units and expects to reach 15 billion baht by year-end.
CBRE expects the number of newly launched condo units of all grades next year in the inner city to total about 12,000, the same as this year.
About 25,000 condo units are under construction and due to be completed from 2015-18. Of this number, 25% or 6,250 units remain for sale, including 1,250 in the luxury segment.
"With positive external influences such as the global economic recovery combined with a stable local political climate, the residential market next year will be very competitive with many new luxury launches coming on to the market," Ms Aliwassa said.
She said land prices in 2015 would rise at a lower pace of 5-10% after soaring by 10-15% a year in recent years. However, land prices in the inner city will never drop due to the scarcity of land and strong demand.
With land prices reaching more than 1 million baht per square wah and increasing construction costs, development costs are inevitably rising. CBRE expects condo prices in the inner city will rise to 200,000 to 300,000 baht per square metre.