Demand for high-end detached homes in the On Nut and Pattanakarn areas of Bangkok have great potential according to the latest survey from real estate firm Plus Property.
The agency reported that the high-end real estate market is still going well despite a weakening economic outlook, and demand is still high for detached houses priced between THB 10 million and THB 20 million in great locations.
It said the Onnut-Pattanakarn area has potential for being the newly sought-after location for long-term living and investments, as sales have been recorded at 83 percent while land prices keep rising by as much as 22 percent.
Poomipak Julmanichoti, Managing Director of Plus Property, revealed the weaker economic conditions have urged individuals to save more and spend cautiously, and financial institutions have become stricter in processing loan approvals.
The decision for residential purchases has been delayed, especially among the medium- to low-end segments, hence the government’s stimulus measures to promote residential loans for houses priced below THB 1.5 million to stimulate purchasing power among the group.
However, the high-end real estate market will remain good, he said, as affluent buyers have not been affected much from the slowing economy.
Findings from Plus Property have indicated that the market for single-detached houses priced between THB 10 million THB 20 million has continued to expand, along with increasing demand.
Although supply for high-end detached houses priced from THB 10 million accounts for only 12.6 percent of total detached housing supply, the combined value is worth 24 percent of the total projects available at present. As such the segment is quite appealing for investments, he concluded.
Location is still a crucial decision-making factor for buyers. The survey reported that the cumulative supply in Salaya-Bang Yai-Nontaburi area totaled 1,598 units, of which 87 percent were sold.
As for Bang Khae-Bang Bon-Ratchapreuk area, the cumulative supply was at 1,351 units, of which 85 percent were sold. In the Onnut-Pattakarn area, which is worth taking a closer look at, had cumulative supply at 936 units of which 83 percent were sold.
The Onnut-Pattanakarn area, considered another location in eastern Bangkok with great potential, has seen a continued stream of demand and relatively good transactions due to the proximity to downtown and convenient transportation routes. Commuting to Sukhumvit, Petchburi, Ramkamhaeng, Ratchadaphisek and the Suvarnabhumi airport takes 15 minutes, thanks to the newly extended section of Pattanakarn Road. In addition the area is surrounded by many department stores and community malls such as Seacon Square, Paradise Park and Mega Bangna, as well as Suanluang Rama IX recreational park.
All these factors promote Onnut-Pattanakarn location as desirable place for living, according to Plus Property.
Due to the potential of th Onnut-Pattanakarn area, real estate developers have continued to launch many horizontal residential properties. The latter half of 2015 saw cumulative supply of detached houses priced between THB 10 million and THB 20 million at 936 units, of which 83 percent were sold. Inventory is now at only 157 units and is expected to be absorbed within nine months, provided that no additional supply will be added.
Consequently detached housing prices tend to rise in accordance with renewed land price appraisal, as for example, the land along the main road of Prawet district is now (2016-2019) 22 percent higher than the previous appraisal (2012-2015).
Average prices are now at THB 99,813 per square wah, while the highest evaluated prices are in the THB 130,000 to THB 170,000 range per square wah. Besides, well-developed infrastructure in the area may contribute to higher detached housing prices in the future. It is also expected that Onnut-Pattanakarn area will be the new and attractive location for long-term living and investment.
“The high-end detached housing market has been expanding as property developers are answering to the demand. There will be more small-size projects in the heart of the city and some projects are spread into peripheral areas to serve the demand and take advantage of the planned transportation projects and upcoming urban development in greater areas,” said Poomipak.