Although it accounts for less than 10 percent of the entire Bangkok condominium market, the prime and super-prime sector of the market has been commanding significant media attention.
The reason – despite the economy slowdown this sector has been enjoying relatively good sales and this, according to real estate firm Knight Frank in its recent research on the market, is due to good locations in the heart of Bangkok, convenient transport links and the scarcity of future land plots for developments.
During the first half of the year, Knight Frank reported that sales prices for new launches at the super-prime end of the market jumped from THB 310,450 per sqm 2014 to THB 329,544 per sqm during the first half of this year. At the same time selling prices of prime condos increased from THB 237,988 per sqm in 2014 to THB 249,622 per sqm by the middle of this year.
Knight Frank reported that during the first six months of this year, there were approximately 852 units sold under both categories. The take-up rate of super-prime and prime condominiums was 89 percent and 67 percent, respectively.
Knight Frank predicted that average selling prices in these sectors will keep increasing.
Super-prime and prime condominium buyers are mostly wealthy Thais and foreigners from Hong Kong, Taiwan and Singapore, and they prefer to buy in the CBD areas because the price is cheap compared with their home country. Emerging demand will be from China and India, the real estate firm added.
Market Outlook
As Bangkok is quickly running out of available space for condominium development, many listed developers have justified their high land acquisition costs by developing projects that can be sold at a higher price range. They often face a dilemma: whether to develop premium high density projects with small unit sizes but high per sqm prices or to develop high value super-luxury projects.
The former would appeal to the upper-middle income buyers and the latter at ultra-high net worth buyers. Either way, Knight Frank expects average selling prices will still continue to rise given the demand for these products remain strong. Anyone expecting super-prime and prime CBD condominium prices to fall is likely to be disappointed, is said. There is more chance of prices rising.
Also Knight Frank said Bangkok will see a new supply of super-prime launches at prices of more than THB 500,000 per sqm or more in the near future. Moreover the super-prime and prime condominiums will adopt the concept of smart living and energy-saving to add high-values to their condominium units, as people are moving into a digital and more Eco-conscious lifestyle.
Definition
According to Knight Frank, super-prime condominiums represent the top 1 percent of the Bangkok condominium market, and according to its latest data there were eight super-prime condominium projects.
Prime condominiums represent the top 6 percent of the Bangkok condominium market and there were 12 projects in this category.
To read the full Knight Frank Super-Prime and Prime Bangkok report click here.
