Price hikes help shine a spotlight on resale condos
published : 25 May 2017 at 08:08
newspaper section: Business
With the average selling price of units in new condominium projects rising sharply, investing in resale units can be attractive as they are 26-44% cheaper, says property consultant Plus Property.
Managing director Anukul Ratpitaksanti said there is continued interest in the resale condo market, motivated by the big price difference.
He said the average selling price of units in new condominium projects has risen sharply. High-rise condo projects with electric train coverage and those in prime areas like the waterfront had an average launch price of 235,000 baht per square metre during 2014-16. Price growth exceeded 10% per year.
The Chao Phraya River waterfront zone that stretches from Phra Pin Klao Bridge to Rama III Bridge had the highest launch price, averaging 366,000 baht per sq m. This represented 44% growth over the previous three years.
The CBD (central business district) came second in average launch prices, which currently run in excess of 200,000 baht per sq m. Within this group, the Phrom Phong-Thong Lor zone boasts an average launch price of 325,000 baht per sq m, and price growth of roughly 25% per year. The Phloenchit-Chidlom-Asok zone has an average launch price of 278,000 baht per sq m, and average price growth of 14% per year. The Ratchathewi-Phaya Thai zone has an average launch price of 255,000 baht per sq m and average price growth of 15% per year.
Mr Anukul said in light of those facts, the condominium resale market has attracted greater interest due to the significantly lower average selling prices compared with new projects in the same localities.
"The resale prices are between 26-44% lower than those for newly launched projects," he said. "Compared with projects for which sales were launched over the past five years, resale units were priced 33% lower, on average, than those at new projects.
"The zone with the starkest price difference was the waterfront (a 44% difference). As for units within the CBD, the Phrom Phong-Thong Lor zone had a price difference of roughly 28%; the Silom-Sathon zone had a price difference of 26%; the Rama IX-Cultural Centre zone had a price difference of 32%; the Ratchathewi-Phaya Thai zone had a price difference of roughly 38%; the Sanam Pao-Mor Chit zone had a price difference of roughly 32%; and the Phra Khanong-On Nut zone had a price difference of roughly 30%."
Mr Anukul said the buildings in resale projects have generally been well maintained and do not differ much from new projects. Although materials or layouts could be somewhat different from newer projects, the lower prices and the fact that locations do not differ from new projects have allowed resale units to be well received. The prime factor comes from the more affordable price, and the fact that new projects are no longer available in some locations.
Developers are increasingly focused on the higher-end market, as this group of customers still has purchasing power and has not been significantly affected by more stringent loan criteria. The price of land in Bangkok has also risen sharply, resulting in new projects having higher launch prices. The resale market, therefore, is increasingly becoming an option for prospective buyers.