Competition in Thailand’s high-end residential market is expected to heat up in 2015 due to significant incoming supply, particularly within the Bangkok market, according to CBRE.
“In the past few years, there has been limited supply of luxury and super-luxury units. 2014 has seen a very limited number of new launches largely due to the political instability in the first half. 2015 will then see pent-up supply being launched in the market,” the consultancy said.
The prime market is expected to be bolstered by the country’s improving economy and political stability, coupled with a rebound in the global economy, especially in Europe and the United States.
Factors that will continue to drive demand include the growing appeal of living with the downtown area and rising foreign interest in Thai property, even though the majority of transactions will still come from wealthy locals.
In addition, posh high-rise projects that will be launched next year are expected to be priced from THB200,000 psm to THB300,000 psm, given the current land prices of over THB1 million per square wah in the prime downtown areas such as Wireless, Ploenchit, Langsuan and Early Sukhumvit to Thonglor.
However, not all developments can achieve this price range because buyers of high-end properties are very selective. They need to be convinced that a project’s features justify its premium pricing, CBRE explained.
“The location must also correspond with the right target market and their requirements. Not every location is suited for a luxury product,” said Aliwassa Pathnadabutr, Managing Director at CBRE Thailand.
“It is also likely that re-sale prices of units in older buildings with good management in prime locations will increase substantially,” she added.
Meanwhile, CBRE Thailand is targeting residential sales of between THB18 billion and THB20 billion in 2015. This year, the consultancy recorded 1,644 residential deals amounting to THB14.35 billion with an average value per transaction of THB8.75 million.
Image: Thonglor, Bangkok. (c) PropertyGuru.
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
