Property market cooling measures elsewhere in Asia are driving demand for property in Bangkok, according to a new research report.
In its latest Property Times market report, DTZ noted that whilst demand for property in the Thai capital will continue to be primarily driven by domestic homebuyers, it has and will continue to see an increasing number of Asian investors purchasing central business district (CBD) condominiums for capital gain and rental investments.
The agency noted foreign property buying activity in Bangkok is coming particularly from China, Hong Kong and Singapore.
In its new report, DTZ noted that the Bangkok CBD condominium market continued to expand in both inner and outer city areas in Q2, albeit at a slower pace. The number of new launches in Q2 was estimated to be 1,600 units, compared to 3,000 units in Q1. The quantum of new launches was largely confined to downtown Sukhumvit with new launches including The Lofts Ekkamai, Eternity and Rhythm 42.
The last few quarters have also seen riverside locations re-emerge in the limelight as quality new projects and marketing strategies target upper-middle homebuyers who want to break away from traditional city centre locations.
According to DTZ riverside accounted for 13 percent of overall launches in H1 and approximately 28 percent of Q2 launches. Part of this revival has been aided by the initiation of new commercial developments that support leisure and lifestyle activities, and trends in what was previously an inactive and sluggish residential neighbourhood.
DTZ predicted that the emergence of new commercial and residential projects, particularly along Charoenkrung and Charoennakorn, will attract increasing attention and thus development of this residential zone.
Apart from CBD locations, areas in fringe and suburban areas continue to portray upbeat launch and take-up momentum. Active zones include Bangna, Paholyothin, Rama 9, Rattanathibet and Thonburi areas, according to DTZ.
On the supply-side, the gradual extension of mass transit lines will continue to open up development opportunities for new players. While on the demand front, this will support urbanisation and lift home-ownership ratio throughout Greater Bangkok.
CBD condominium projects launched in H1 recorded an average take-up rate of 53 percent. Certain projects commanding affordable pricing, attractive down-payment packages and convenient and accessible locations were able to achieve 80 percent-100 percent sales within weeks of launch.
Current home-buyer purchasing decision is not only confined to location as other factors such as quality, size, affordability, availability of financing and access to amenities and landmarks all play important roles, according to DTZ.
The majority of new launches in Q2 were mostly of “super luxury” and “luxury” grade, owing largely to persistent rises in land values and development-related costs. New launch prices rose 5.5 percent quarter-on-quarter to reach an average of THB152,000 per sqm in Q2. Moving forward, DTZ expects prices to continue rising moderately in line with rising costs.
Capital values for CBD resale condominiums in Q2 edged up slightly by 0.6 percent quarter-on-quarter and 2.6 percent year-on-year to reach an average of THB86,500 per sqm, DTZ noted.
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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