Located within or bordering central Bangkok’s CBD, the Silom-Sathorn-Rama III area has continued to see condo development, and the prices of such units continue to grow. The average annual growth of condominium prices is 7.8 percent, reports Knight Frank Chartered (Thailand). Mr. Frank Khan, the firm’s executive director and head of its residential unit, commented that this is due to the limited supply of land for development in the area, as well as increasing development costs.
During the past few years, the new condominium supply in Silom-Sathorn-Rama III ranged between 2,000 and 4,500 units per annum. The area currently comprises 4 to 8 percent of the total supply in Bangkok’s condo market. Grade-C units comprise almost half of Silom-Sathorn-Rama III’s supply, followed by grade-B condominiums at 29 percent.
For investors, one-bedroom units yield higher average rental returns than two-bedroom units, but the higher supply of one-bedrooms in the market causes more competition in leasing activity, said Mr. Khan.
He added that condo investments are better suited for the long term, as property owners can avoid the 3.3-percent Special Business Tax when they sell the unit after holding it for at least 5 years. Also, Silom-Sathorn-Rama III condos command a higher rental yield when compared to medium and long term regional investments, such as government bonds in Malaysia and Singapore – and this is without considering the condos’ potential for capital appreciation, Mr. Khan stressed.
