Bangkok’s condominium market in the central business district (CBD) continued to expand during Q2 2015, driven by the success of off-plan sales in newly launched condominium projects.
New research from real estate firm DTZ reported healthy demand for condominium units in the market that continued to drive further development activity, with a significant supply of new projects from Thailand’s large and experienced developers due to enter the market through 2015.
DTZ reported that 4,106 units from eight condominium projects were launched during Q2 2015 in the CBD. This is a strong increase of 37 percent quarter-on-quarter (q-o-q) from 2,991 units in Q1 2015, indicating robust demand for such properties.
The majority (82.2 percent) of the new condominium supply in the CBD was in the Sukhumvit area, followed by the Central area (13.3 percent) and Silom/Sathorn area (4.5 percent).
CBD areas maintain appeal to buyers
The demand for high value units with superior specifications in CBD areas remained strong, with some developers able to sell 100 percent of their projects prior to launching. The average take up rate of new units was registered at 60 percent in Q2 2015.
The buyers of the top quality projects tend to seek these types of condominiums for their own occupation or long-term capital appreciation.
DTZ also expects to see an increase in foreign buyers investing in high value properties in Bangkok’s CBD areas. This is particularly in view of the increasing number of projects that are being launched in Hong Kong, Taiwan and Singapore, is said.
Luxury condominium projects dominate the market
Luxury condominium projects, with average unit selling prices ranging between THB170,000 per sqm and THB 249,999 per sqm dominated the CBD market. Luxury units accounted for 51.6 percent of the total supply in the quarter, followed by Grade ‘A’ (41.7 percent) and Super-Luxury (6.6 percent).
The efficient rate of absorption suggests the strong preference for high value condominiums in CBD areas despite higher prices. The average unit selling price reached THB 197,100 per sqm in Q2, increasing by 1.7 percent q-o-q. It is anticipated that the average unit selling price in all CBD areas will continue to moderately increase as there is a scarcity of developable land plots and top quality projects in CBD areas.
The condominium market has seen an uptrend in supply through H2 2015. DTZ said it expects to see a continuation of the trend of luxury projects located in prime Sukhumvit areas
Resale value continues to increase
According to the research from DTZ, the resale values of condominium units in Bangkok’s CBD continued to increase in Q2 2015. The average asking price of resale condominium units was recorded at THB 100,500 per sqm, representing an increase of 1.5 percent q-o-q, and up by 14.3 percent y-o-y.
