In its latest Bangkok market report, real estate agency DTZ has highlighted the new risks of domestic political unrest and the slow recovery of domestic consumption and export performance as factors that may damage growth in 2014.
The report noted that there was a sharp rise in the number of residential launches in Q4 within the central business district of the Thai capital, which totalled 3,000 units, lifting the overall annual launch to more than 10,000 units in 2013 versus 7,235 units in 2012. This was an all-time record number.
The lack of prime development sites will continue to drive demand for top quality residential property in superb locations, is said.
The report noted that the fourth quarter saw a sharp rise in the number of launches just before the end of the year and prior to the peak of the political rallies and the chain of festivities in December. Notwithstanding the political tensions, developer launch activity remained upbeat on the back of consistent demand from domestic purchasers.
The Sukhumvit zone recorded the largest number of launches with approximately 1,577 units, according to DTZ, representing over half of total launches in Q4. Whilst demand for small and compact condominium units has been consistently positive over the last two years due to their affordable pricing and payment schemes, there has also recently been a burgeoning appetite for larger and more spacious condominium units.
The lack of prime sites and the consistent rise in luxury condominium launch prices have ignited a surge in homebuyers seeking top quality products, according to DTZ. In line with this, prime projects, which command exceptional location and quality, drove the average launch prices of super luxury projects upwards from THB193,000 per sqm in Q1 to THB225,000 per sqm in Q4.
Capital values for resale CBD condominium units rose marginally by 0.3 percent quarter on-quarter and by 2.6 percent year-on-year to reach an average of THB87,400 per sqm, according to research from DTZ.
Within the CBD, resale activity in Sukhumvit was particularly high as local homebuyers seek value-for-money purchase opportunities from older secondary properties in good locations.
CBD condominium projects launched in Q4 recorded an average take-up rate of 60 percent, it noted in the report. Despite a dimmer economic performance and declining sentiment in the overall economy, the condominium sector managed to attain an average absorption level averaging 57 percent for 2013, it noted.
DDproperty.com said that data showed that property prices rose during almost all periods of previous political tension, driven by demand from local buyers.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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