One of the more interesting facts to emerge from recent research from real estate firm Knight Frank Thailand is that many of the recent-launched developments in the peripheral areas of Bangkok are, in its opinion, overpriced.
Knight Frank reached its conclusion when it compared the prices of comparable units in the “city fringes” of Bangkok where access to the mass-transit networks and central business districts is “more convenient”, with those further from the city and where transport to the centre of the capital is most troublesome.
It said that land scarcity in the city fringe areas had forced prices up, and this in turn had been passed on in the prices of the units in areas further from the city.
Knight Frank defines the “city fringe” area of Bangkok as locations such as Ratchada-Ladprao Area and both sides of Ratchadapisek Road, and the beginning of Ladprao close to mass-transit stations. Phahonyothin – which has just started to become popular – is also included between Soi 1 and 13 and Soi 2 to 14.
In terms of Bangkok’s “peripheral areas”, Knight Frank classes these as being late Sukhumvit on both sides of the road beyond Soi 63 stretching to the Bang Na intersection, as well the Thonburi side of the Chao Phyara River, Srinakarin, Chaengwattana, Kaset-Navamin and Petchkasem among others.
That said, Knight Frank also reported that demand from affluent buyers remained strong as high-end condominiums with average selling prices of THB 150,000 per sqm from reputable developers in prime locations in the heart of central Bangkok did not take long to sell out.
The average selling price in these areas stood at THB 212,588 per sqm as at the end of Q2 which was an increase of 18.5 percent over the prices recorded for the same location during in Q2 2014.
In terms of units being overpriced, some developers have already been launching discount promotions at some of their projects, while the Thai government has also expressed its intention to assist low-income earners to obtain finance and to reduce the costs associated with buying a property.