If you are looking for a property bargain in Bangkok, there are 44,720 housing units (mostly townhouses and semi-detached) selling for less than 2 million baht each. But that represents only 5% of all units in the market, compared with as much as 40% a decade ago. This reflects the high cost of developing housing in the capital, especially for land.
All the housing projects with units in this price range are in suburban areas of Bangkok, especially in eastern and northern districts such as Nong Chok, Khlong Sam Wa, Prawet, Lat Krabang, Saphan Sung and Sai Mai districts.
Only a few units priced below 2 million baht per unit remain in Thon Buri and neighbouring districts on the west side of the Chao Phraya River, as the arrival of mass-transit lines has pushed up prices considerably.
In the northern part of Bangkok, construction of the Pink Line is still in the very early stages in the area along Ram Intra road. Therefore, land prices have not increased too much so far.
The main listed developers in low-priced housing (below 2 million baht) are Pruksa Real Estate Plc and Golden Land Property Development Plc, but many small and medium-sized developers are also active.
Larger developers launched projects in the suburbs and adjacent provinces when land prices were low, making it easier and cheaper to build than in inner Bangkok area. Townhouses account for almost all the units in this price range, with semi-detached houses making up about 10%.
Some locations on the Thon Buri side and along Sukhumvit Road still have units priced below 2 million baht, but the continuing progress of mass-transit extensions virtually ensures that no such bargain housing will be available in the future.
Developers who want to offer low-cost housing are moving into adjacent provinces: Nonthaburi, Pathum Thani, Samut Prakan, Nakhon Pathom and Samut Sakhon. They are confident of finding buyers looking for affordable accommodation, especially now that mass transit is available in parts of Nonthaburi and Samut Prakan.
The 2-million-baht condominium unit is also becoming an endangered species in Bangkok, representing just 18% of all units on the market. The most common condo price range these days is between 2 million and 5 million baht.
Although average take-up rates in the sub-2-million price range are high, at 83% for condominiums and 59% for houses, developers are reducing their share in this market. Another risk factor is that many buyers in this price range have quite low incomes to begin with and struggle to obtain loan approval from banks.
Surachet Kongcheep is the managing director of Phoenix Property Development and Consultancy Co Ltd.