By Andrew Batt:
Bangkok condominium prices are expected to continue their upward trend after new research revealed a 7.1 percent jump in average prices in the central business district during the first three months of this year.
Knight Frank Thailand, in its latest report, noted that average condominium prices in the Thai capital’s CBD now stand at THB161,314 per sqm. Price rises in the suburbs also rose 11.8 percent where average prices now stand at THB60,286 per sqm.
The first quarter of the year saw 17,869 new units launched into the Bangkok condominium market. A total of 73 percent of new launched were in the peripheral areas of Bangkok, which the report noted as being “a hot commodity” as developers rushed to launch new projects to tap strong demand from low income earners. Most of these launches were priced at below THB3 million.
Bangkok’s central business district saw 2,316 units launched in the period – a relatively low number due to scarcity of land and “skyrocketing” construction costs.
Take-up across the city was 55.4 percent, according to the report.
Risinee Sarikputra, Director of Research and Consultancy for Knight Frank Thailand, said in the report: “Property firms are ready to expand their investments into the suburb of Bangkok, especially in locations close to the purple line mass-transit route from Bang Sue to Bang Yai,” the report said.
“This route, together with the future line running from Bang Sue to Rat Burana, and the ongoing MRT pink line project which incorporates the new government centre on Chaeng Wattana Road to Minburi, has encouraged many listed and non-listed developers to launch their projects within this peripheral area during the first quarter,” she added.
Knight Frank Thailand is predicting prices of new condominiums in Bangkok, especially in the central business district, will continue to edge higher on the back of rising land prices, higher construction costs and the rising value of the Thai baht which is impacting raw material prices.
An abundance of new supply last year, especially in the peripheral areas of Bangkok, has forced some developers to slow down in order to avoid bubble conditions, according to the report.
Average selling prices of condominiums in the CBD during Q1 2013 stood at THB161,314 per sqm, mostly driven by the launch of premium condominium projects in the city area around inner Sukhumvit.
In summarising the outlook, Knight Frank Thailand noted that demand for condominiums in Bangkok will remain high whilst supply has slowed. This will likely see a sharp increase in prices.
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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