Nexus Property Marketing indicated the property market in Bangkok has been adjusted to serve the foreign investment, while more mid-sized players and new developers tap into the market.
Large-sized developers seek the investment opportunity in the property leasing market to manage their cost more effectively and generate the long-term revenue. The market of luxury residential in the centre of Bangkok remain growing in the second half of this year.
Ms. Nalinrat Chareonsuphong, Managing Director of Nexus Property Marketing, a property advisor, said the property market climate in Bangkok kept vigorous in the first quarter of 2018.
There are several situations that we should keep our eyes on including investment, land price and the trend in the second half of this year as well as the market possibility next year.
Issues 1 :
During the first quarter of the year. There are 14,094 units of condominium launched in the Bangkok market from both large and small developers.
The number of new units were correspondent to the earlier projection hence resulting in the total of 564,000 units. Due to the rising of land price in the heart of Bangkok, it was very challenging for the developers to retain the land for new development.
Therefore, most projects were located in further Sukhumvit zone (29%), Phayathai-Ratchadapisek-Rama 9 zone (23%) and Thaksin-Petchkasem (17%).
In the second half of 2018, we should see more projects in Chaengwattana and Ram-indra area due to the clearer plan of pink line mass rapid transit.
However, we will see more projects of super luxury condominiums with the starting price of 400,000 baht per square meter by the end of this year or the early next year, as a result of the higher land price.
Meanwhile, the market of city condominium will keep expanding into the area of the rapid mass transit extension so the price in this market will not be much increased.
Issues 2 :
Over the past years, condominium development from the listed property developers accounted for 70% of the overall market. However, the proportion of mid-to small-sized developers including foreign developers has obviously increased in the first quarter this year.
Around 38% of the new units were developed by the mid-sized developers and newcomers. Additionally, several mid-sized developers have also cited the listing plan in their roadmaps within the next 1-2 years.
Meanwhile, the large-sized or listed developers have granted their eyes to more sustainable development market and be cautious of investing land in the downtown.
They focus more on the development of housing projects, the long-term land leasing for developing hotels or office buildings, and property investment in overseas.
Issues 3 :
Foreign investment. In the first quarter, around 20% of total condominium units in Bangkok were launched by Chinese large-sized companies without investing as joint ventures with Thai developers.
The combined value of their projects was over 30 billion baht. Such movement has reflected from the foreigners’ investment confidence in Thailand.
Despite there are already very active in Thai market, Japan, Hong Kong and Singapore, they also look for the opportunities to invest in the Kingdom.
We have started to see more condominium projects that target Japanese people in Thailand as well as we expect to see at least 4-5 large-sized projects from Japanese developers this year.
Issues 4 :
Foreign individual investors. They have shown their interest to buy condominium for investment continuously. Their main reason is because the price of Thai property remains very reasonable in comparison to the property in their countries especially Hong Kong and Japan.
In addition, because it does not take long time for them to travel from their countries to Bangkok, they buy condominium in Bangkok as their second home either for holiday or for rent.
Previously, we saw such investment trend only in luxurious and super luxurious condominium, however, investors have expanded their investment to high-end and mid markets.
Chinese investors also expand their investment in overseas in order to minimize their risk. Thai large-sized developers brought their property to roadshow in those contain as well as roadshow set up the offices in other countries to respond to, raising demand from overseas particularly in Asia constantly.
Besides, more foreign investors see the opportunity in buying bulk units so they look to purchase the units in the foreigner’s quota of 49% to propose and sell to individual investors in other countries. Meanwhile, those individual buyers are keen to buying condominiums in Thailand and their surging demand keeps pushing the growth in the market continuously.
Content 5 :
New-generation developers who retain financial support from their family business have made more joint ventures to develop new-styled residential projects including luxury condominium or housing projects.
These developers are similar to startups in other business in terms of low management cost and high flexibility. Some of them have already had the market for their development by means of the network of their core business.
They do not focus only on residential projects but also new-styled hotels, apartment, co-working space and lifestyle retail space.
Content 6 :
Many housing projects have added the living platforms that respond to the rapidly changing of Thai people’s lifestyle as another unique selling point, for example, the home automation and the customer service via mobile applications, smart robot, smart locker and etc.
Certainly, these platforms responding to the new generation’s demand are expected to become the hot trend soon as they help enhance the level of safety and comfortability in home.
Content 7 :
The prospect for the residential market in the second half of this year is expected to achieve the growth from foreign buyers. The selling price is being adjusted higher to be in line with higher cost.
More of smaller-sized projects will be launched by new developers. Demand for luxurious property will remain of interest. The locations for project development will be shifted from Thong Lor to Ekamai, and the farther area in Soi Sukhumvit 31-49.
As foreigners have purchased and made more investment in Thailand’s property, market, the uncertainly of their economic, political and investment climate as well as their own currency will have more significant impact on Thai property market than in the past.