New research from Plus Property shows that resale units in condominiums located in Bangkok’s prime locations are still an attractive investment. This is because the selling price of these units is lower than those of new units with strong average capital gains still available.
During the past four years, some investors have targeted Bangkok’s resale condo market where selling prices are 30 to 40 percent lower than those of newly launched units in the same locations.
“The price difference between newly-launched and resale condo units is driven by higher land prices. In prime locations where land plots are scarce, the price differences are quite large,” Poomipak Julmanichoti, managing director of Plus Property, explained.
For example, the selling prices of condo units launched in the Thong Lor area during 2015 started at THB275,000 per sqm. This is a 56 percent increase from THB176,000 per sqm. found in the area in 2012. Plus Property’s research also showed that the selling prices of projects completed in 2014 have jumped an impressive 80 percent over the course of the last two years.
The asking price for new high-end condo in Central Lumpini, Silom-Sathon, Sukhumvit and other prime locations rose seven percent year-on-year, according to CBRE Thailand. The reason for the constant price increase has been due to a similar increase in Bangkok land prices.
The Agency for Real Estate Affairs revealed that average land prices in Greater Bangkok increased 47-fold during the past 30 years. The city’s central business district has seen the largest increase, rising 37.1 percent per year. It was noted that the biggest land price increases occurred at Ratchadapisek-Tha Phra Road, Kluai Nam Thai-Rama IV and Samrong.
High-rise condos in the central business district unsurprisingly having recorded the highest price increases. Poomipak explained that while the resale market has slowed down during the past two years, this could actually be a good thing since it has cut down on property speculation.
