Over the past five years the Ratchada-Ladprao area in Bangkok has undergone many changes that are underlining its potential to be one of the next prime property areas in the Thai capital.
Recent research from Knight Frank Thailand noted how factors such as convenient access to the mass transit system and connectivity to major city roads have encouraged robust expansion in every segment of the property market.
In the condominium market, large Stock Exchange of Thailand-listed developers have entered the market, causing the supply to surge while enhancing the area’s high-end offerings.
Since 2011 the condo supply has exceeded demand however the take-up rate remained relatively high at approximately 62.6 percent as of the end of 2013.
Risinee Sarikaputra, Director, Head of Research and Consultancy, Knight Frank Chartered (Thailand), said: “Looking back over the last five years, the supply of condominium units in the Ratchada–Ladprao area has significantly increased.
“In 2013 a continuous increase of new supply caused the condo market to overheat. Also, selling prices of the units were found to have increased approximately 8 percent per annum, reflecting an increase in development costs, including land price, labour and material costs.
“Ratchada–Ladprao has also attracted many SET-listed development companies with well-known brand reputations, such as Pruksa Real Estate, Asian Property Development and Noble Development, and they have started to develop high-end products.”
Risinee added that, at present, the area features many condominium projects with sale prices of more than THB100,000 per sqm, such as Quinn Condo Ratchada, Centric Huai Kwang, Noble Revolve Ratchada, Rhythm Asoke and Condolette Midst Rama 9.
This has never been seen before, she noted, even though these condominium developments are mostly located on the main road. It reflects the area’s strong potential to be another prime location in Bangkok.
Additionally, the area houses many commercial properties, including department stores, hypermarkets and office buildings, and it is served by the existing Mass Rapid Transit system.
“Nevertheless, we observed that the condominium supply has exceeded demand since 2011. The flood crisis in 2011, government’s first car policy, tightening of residential loan requirements and political uncertainty have all directly or indirectly affected buyers’ wealth and appetite for buying condominiums.
“A continuous increase of supply in the face of diminishing demand may thus result in sluggish market conditions where developers struggle to sell their entire project, and they may face financial difficulties from the unexpected extension of their selling periods.”
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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