Bangkok’s real estate market had a solid 2016 with most areas performing well, reports JLL. The capital’s commercial sectors recorded strong occupancy and rising rents with a well-balanced demand and supply. Bangkok’s luxury condominium market continues to grow, but the mass market segments are showing signs of being saturated as demand shrinks and prices stagnate.
“We are entering 2017 with new challenges and opportunities for the Bangkok real estate market,” says Suphin Mechuchep, Managing Director of JLL. “There are a number of factors that may both positively and negatively affect real estate such as the government’s push for infrastructure projects, the introduction of the land and building tax, continued rise in land prices, and global political and economic uncertainty.”
One sector not expected to be affected is the commercial sector. Bangkok’s office market has been a consistent bright spot for several years. Vacancy rates across the market are now at or near all-time low levels with healthy demand, particularly for space in newly finished buildings, bringing in impressive average gross rents.
“We do not expect fundamentals in most of Bangkok’s property sectors in 2017 to change significantly from 2016,” says Suphin. “Buoyant demand and limited supply will continue to support growth in the city’s commercial sectors while the condominium sector is likely to continue to face headwinds.”
Developers such as Sansiri, LPN, Ananda, and SC Asset are increasingly moving up-market and launching new projects priced at or near the very top of the market as the low-end market continues to struggle. Some companies have found it hard to transfer units to buyers in the mass-market segments.
JLL expects the amount of completed units at the top end of the market to grow to 1,430 by the end of the year. This will nearly double the 2016 figure and this total is set to increase by more than 5 times over the next 4 years. JLL concludes that while the market as a whole may soften in 2017, things should remain healthy.
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