Condominium units priced at 1-2 million baht accounted for the largest number of new launches last year due to strong demand from real buyers, speculators and investors, according to leading property consultant Agency for Real Estate Affairs.
President Sopon Pornchokchai said the ratio of speculators and investors to real buyers in this price range tends to increase from 1:2 to 1.1:1.9.
"Buying for rent is in an upward trend as yields are approximately 6% a year, which is more attractive and higher than interest from a bank deposit," he said yesterday.
"At this price [1-2 million baht], it is easier to speculate due to a minimal amount for the down payment."
Real buyers were lured by advertisements with a concept of clinging to mass transit lines as a selling point, while developers offered smaller units to fit buyers' purchasing power amid rising land and construction costs.
According to the consultant's survey of newly launched housing in Greater Bangkok last year, 33,827 of the total of 102,080 units were condo units priced at 1-2 million baht.
The second-largest sector was condo units priced at 2-3 million baht with 12,124 units.
Mr Sopon said condo units for rent became attractive even away from existing or new mass transit lines.
Several new condo projects were launched last year on Bang Na-Trat Road KM 26 near Abac's Bang Na campus in Bangkok.
Over the past few years, rental rates for a condo unit in this location were as high as 8,000 baht a month due to strong demand from students.
"The country's economic growth will continue to boost the housing market this year, with condos remaining a highlight," Mr Sopon said. "Single houses and townhouses will also improve as concerns over flooding have eased since last year."
About 60% of new launches this year will be condos, as in 2012. Mr Sopon sees no oversupply in the condo market as the economy remains good, sales remain strong and unit prices are on an upward trend.
However, to prevent overheating and to reduce any risk of speculation in the condo market, he suggests an escrow account should be used for transactions to create a fair market.
Asean economic integration will attract more rich people to buy property in Thailand. Last year rich Laotians bought property in Nong Khai and Pattaya, Mr Sopon said.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter