Bangkok’s real estate and property sector can look forward to a bright second half of the year, according to a new research report from DTZ.
In its quarterly Property Times report, the agency noted how launch activity picked up in the fringe and suburbs. Q2 saw a slow pick-up in condominium launch activity with only three projects, totalling some 1,120 units, being launched in the central business district of the Thai capital.
Despite the political concerns, the take-up of these new projects was surprisingly upbeat with more than 40 percent of units being sold within weeks of their launch. It was noticeable that overall sentiment among developers and homebuyers was more positive in Q2 compared to the previous quarter. DTZ noted.
The bulk of new launches were largely registered in the fringe and suburban areas of Bangkok where there is still healthy occupier demand.
Major developers generally adopted a wait-and-see attitude to launching new projects in Bangkok’s CBD areas. Besides being concentrated in the fringe and suburbs, new projects were also launched in the provincial and beach towns such as Pattaya, Sri Racha, Hua Hin and Pranburi.
The political stalemate and worries on household debt burden continued to be the two main concerns affecting homebuyers’ sentiment in early Q2.
On a positive note, the lack of new launches in the CBD has increased demand for resale condominium units, particularly high-end and luxury projects that are in limited supply. Homebuyers tend to seek these types of properties for owner-occupation and long-term capital appreciation. However, many homeowners of prime condominium units are reluctant to sell as there is a lack of alternative investment choices for luxury products in prime neighbourhoods, or those with excellent connectivity to the mass transit lines.
With this, capital values for both first-hand and resale luxury condominium units, particularly in the Sathorn and Sukhumvit areas, remained buoyant despite the negative market backdrop.
Capital values for resale CBD condominium units edged up slightly to THB87,900 per sqm in Q2 from THB87,400 per sqm in the previous quarter.
With the lack of luxury launches, average prices of first-hand luxury and super luxury condominium units similarly rose slightly from THB225,000 per sqm in Q1 to THB230,000 per sqm in Q2.
Several large and listed developers have recently announced plans for site acquisitions and new development projects, which will help lift the overall capital values in Bangkok and also in the traditional and new provincial towns throughout Thailand.
More activity anticipated in H2
Amid a more positive economic and market outlook, DTZ expects purchasing sentiment to improve, albeit selectively, depending on location and product segment. Launch activity is also expected to pick up in H2 as developers foresee more clarity with regard to the overall property environment as well as clearer infrastructure plans announced by the temporary military government.
Despite scrapping the high-speed rail project, the government is reviewing other key infrastructure plans which will be announced before year-end. Some of these projects are likely to commence as soon as next year, paving the way for urban expansion and property development opportunities for developers.
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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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If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg