by kevinyeo | Jan 16, 2018 | Bangkok Property Market Updates, Investment Analysis
The overall Bangkok property market in 2017 was very interesting, especially in terms of new condominiums launched, with the total of 56,000 units the highest in several years. As well, joint ventures between Thai and foreign developers, particularly Japanese, are shaking up the market, as is the growing number of large mixed-use projects being announced.
Many mixed-use projects are worth watching closely, as they could bring about major changes in the communities surrounding them. Many people are also concerned about the environmental impact of such large-scale projects once they are completed.
The many factors that directly affected the property market will not change much in 2018, although some positive trends are expected to have a positive impact. Economic conditions in 2018 are expected to be better than in the past few years, as key drivers including exports and tourism are showing continuing improvement from 2017. In addition, investment from both the government and private sector is on the uptrend.
While government and private-sector economists are bullish on the prospects for GDP growth of around 4%, consumer confidence and spending may not be as strong as they could be. The chief constraints are high household debt and confidence about the long-term political situation as the country heads towards an election expected late this year.
In any case, activity in the Bangkok condominium market in 2018 should continue to increase from the second half of 2017. Many developers, especially listed companies, still have expansion plans. Total new condominium launches should be similar to last year’s level of 56,000 units, depending on purchasing power and the transfer rate. Bank lending policies will be the key to transfers of many projects scheduled for completion in 2018. If buyers cancel bookings because they cannot secure mortgages, this will directly affect developers and the overall market.
Nevertheless, the overall trend in the condominium market remains the same, with most of the activity concentrated in areas near planned and under-construction mass-transit lines. All developers are looking for promising land plots for new condo projects, particularly those with unit prices between 3 million and 4 million baht each. In addition, some developers are planning to launch high-end and luxury projects in inner Bangkok because they need to diversify their revenue streams.
While developers are also looking at single detached housing projects, activity in this segment could decrease in the future because of the steady rise in land prices. Meanwhile, developers will carefully monitor the condominium market because they don’t want to rely on too high a level of investors or speculators as in some periods in the past.
The average take-up rate for new condominium units launched in 2018 is expected to be 65-70% — or 7-8 points higher than in 2017 when a lot of new projects came on the market — but much still depends on economic conditions and buyer confidence.
Among the other property sectors expected to show growth, the most interesting is office buildings, for which demand has strengthened in the past one or two years. Demand will continue to rise in 2018, but with some 750,000 square meters of space expected to come on the market between now and 2021, demand and take-up could start to ebb if the economy does not perform as expected or politics takes an unexpected turn.
The retail property market may be facing a tough year compared with other sectors, as many tenants have been affected directly by weak consumer spending amid concerns about the economy and politics in recent years. In addition, online shopping is affecting the fortunes of brick-and-mortar retailers, but to a much lesser extent than we are seeing in some other countries.
The number of new retail projects is on a declining trend, particularly community malls, many of which are not as popular or successful as in their heyday a decade ago.
More joint ventures between Thai and foreign companies are in the pipeline, and some significant deals may be announced in 2018, with a rising proportion of Chinese companies involved. The residential market will be the main market for all developers, but they are also looking for opportunities in other sectors, especially those that can generate recurring income.
by kevinyeo | Jan 11, 2018 | Bangkok Property Market Updates, Developer Watch, Investment Analysis
Medium-sized developers have pinned their hopes on the country’s economic growth and government spending in megaprojects to help boost the property market this year.
Dusadee Tancharoen, managing director of SET-listed developer MK Real Estate Development Plc, said the Thai property market will continue growing, driven by government investment and people’s confidence in the political situation.
“The property market in the first half of 2017 slowed as most developers focused on selling inventory rather than launching new projects,” she said. “In the second half, the market improved after movement on the government’s investment in transport networks and infrastructure projects.”
Plans for a general election in 2018 have also boosted confidence among investors, said Ms Dusadee.
The Eastern Economic Corridor (EEC) is another key driver boosting economic sentiment and property investment, she said. MK has a housing project in Bang Na that received good feedback with a sales rate of 80% in the first phase during its October launch.
“Better sentiment in the fourth quarter of last year will continue this year. The property market is expected to grow 6-8% in 2018, compared with growth of 2-3% last year,” she said.
Chaiyan Chakarakul, managing director of SET-listed developer Lalin Property Plc, said economic expansion for Thailand and the world, on top of government investment in the EEC and mass transit lines, will help drive the Thai property market to grow 5-7% in 2018.
“There are good signs for the Thai economy. It will expand 3.8-3.9% this year, being boosted by an expansion in exports and tourism, government spending on infrastructure projects and a general election by the end of 2018 or early 2019,” he said.
This year Lalin plans to launch 8-10 new projects worth 4.5-5 billion baht in Greater Bangkok and beyond.
The company expects 4.4 billion baht in presales and 4 billion in revenue by year-end, up 15% from last year.
He said positive factors will include a reduction in the household debt-to-GDP ratio to 78% and steady interest rates despite an uptick in US interest rates. These factors will help boost purchasing power in the housing market.
About 80% of the new projects will be in Greater Bangkok and the rest in provinces, including Chachoengsao and Chon Buri, where the firm will develop units priced 2-6 million baht.
Lalin will spend 1 billion baht to buy new plots of land. The company will also issue bonds worth 1.1-1.2 billion baht in April, which will expire in three years, to support business expansion.
by kevinyeo | Jan 2, 2018 | Bangkok Property Market Updates, Investment Analysis
BANGKOK’S residential property market will see a growth of up to 7 per cent in 2018 from this year, thanks to the government’s proposed expansion of investment for infrastructure projects, property agencies said.
Knight Frank Thailand Co Ltd’s managing director Phanom Kanjanathiemthao said that the capital’s residential property market would be among those segments set to experience the most growth, in the range of 5 to 7 per cent in terms of the number of units and project value.
This corresponds with the views of major project developers who, on the whole, continue to view the market as one with growth opportunities.
As such, their plans to propel their businesses reflect the residential market’s potential. At the same time, their offerings and products next year should remain the same, without major changes in room layout or unit sizes; developers will instead look to enhancing project facilities in order to differentiate themselves and help boost sales. In general, projects will include features like automated parking, which can add 20 to 30 per cent to their capacity, compared to the old parking systems; and home automation systems.
The development of residential projects next year will continue to focus on areas accessible by the train network, especially the Orange Line, the Blue Line, and the extension of the Green Line that is in progress. The market will expand to the outskirts of Bangkok, with the trains making it convenient for people to travel into the city as well as to anticipate their approximate travel times.
As for the single home and townhouse market in the outskirts of the city, the outlook is that the rate of expansion will be low, with traffic issues accounting for the main factor hampering growth. Also, single home and townhouse projects are generally far from the train lines. There are very few plans to build new roads to accommodate the number of cars and ease traffic issues. The condominium market thus has an advantage to being close to the train lines; moreover, they don’t require huge plots of land for development.
The market for B-C grade condos will remain largely comprised of Thai buyers. Condos in the Sukhumvit area, serviced by the Green Line – Baring trains and the subway from Bangsue – Ladprao, will attract more foreign investors such as those from mainland China, Hong Kong, Malaysia, Singapore, and Taiwan. Investors from other countries also exist but in small numbers. The factors that encourage target buyers to make their purchasing decisions vary from market to market.
Location viewed as priority
For the condominium market, buyers will first and foremost consider the location, with the ability |to travel easily into the city as an important factor. Also, they will look at the development, unit size, facilities and amenities, and pricing.
For the single house and townhouse market, buyers will first consider the usable space, followed by facilities and amenities in the development, and location, property agency said.
Meanwhile, the townhome market in Bangkok and Greater Bangkok – including Krathum Ban-Sam Phran, Thung Khru-Phra Pradaeng, Thon Buri-Rat Burana, Lat Lum Kaew, Don Mueang-Sai Mai, On Nut-Bang Na and Suvarnabhumi-Bang Sao Thong – will see current pricing continuing to attract buyers, according to a survey by Plus Property Co Ltd, a property agency and management arm of Sansiri Plc.
The company’s managing director Anukul Ratpitaksanti said that prices in these seven areas range between THB 1.2 and THB 2.99 million, and these development projects have been warmly received because of transportation linkages into Bangkok. Analysis deemed that offer prices (THB 1.2-THB 2.99 million) were not high for all of the locales, whereas offer prices in the Krathum Ban-Sam Phran area start lower than THB 1.2 million.
“Results from our surveys point to a return of purchasing power for the town house category. Demand and supply continued to grow healthily in 2017 although there were no specific policies to stimulate the real estate sector,” Anukul said.
“We expect the market for townhomes to continue growing in 2018 because offer prices have yet to rise significantly, and the prices match the purchasing power of locals in the suburbs. Consumer confidence is also expected to grow in the same direction as the continually improving economy in 2017, and this momentum is expected to carry over to 2018.”
by kevinyeo | Jan 2, 2018 | Bangkok Property Market Updates, Investment Analysis
Tisco Securities Co Ltd suggests that investors should move into property sector now that the sector has shown signs of recovery that point to strong growth in 2018. The company especially likes Land & Houses Plc, Quality Houses Plc and Pruksa Holding Plc.
Tisco notes that these developers have built low-rise housing such as single-detached houses, twinhouses and townhouses. This strategy will help them generate income faster than would be the case with condominiums, which typically take more than two years from a construction start until the transfer to customers. As well, share prices in the sector this year are lower than that suggested by the companies’ fundamentals, the brokerage said, adding that this could stoke the interest of some investors.
The Tisco research also said that the government’s proposed investment in big infrastructure projects – due to start in 2018 – would boost demand for residential projects around the new mass transit routes.
Property firms also plan to launch more new residential projects, including for condominiums and low-rise resident projects such as single-detached house, twinhouses and townhouses in 2018 around existing and proposed mass transit routes.
This trend would spur their presales growth next year. The developers also show signs of boosting their revenue in 2018, compared with this year, as most of their property backlog will be transferred to customers over the coming year. This is especially so for condominium projects that launched in 2016, the research said.
Yuanta Securities (Thailand) Co Ltd forecasts that Quality Houses Plc will announce net profit THB 961 million for the fourth quarter of this year, up 13 per cent from the third quarter of this year and 42 per cent from the same period of last year, thanks to the transfer of its condominium projects – the Trust @ BTS Erawan station, worth THB 3.4 billion, and Casa @ MRT Bangyai station, worth THB 1.7 billion. This would drive Quality Houses Plc’s total revenue and net profit in the last quarter of this year to a record high.
Bualuang Securities Plc analyst Naramol Eaksamut said that in November, most of the listed property firms launched more residential project to boost their sale in the last quarter of this year, compared with the first three quarters of this year. This will boost their presales in the last quarter to growth of up to 15 per cent from the same period of last year. The top nine firms that launch more residential projects in the last quarter of this year include Ananda Development Plc, AP (Thailand) Plc, Land & Houses Plc, LPN Development Plc, Pruksa Holding Plc, Quality Houses Plc, SC Asset Corporation Plc, Sansiri Plc, and Supalai Plc, Naramol said.
Sansiri Plc’s chief operating officer Uthai Uthaisangsuk said that the company had sold out its two condominium projects under the brand D Condo at Chiang Mai and Phuket, for a total of THB 3.3 billion. The success comes as it seeks to hit a presales target of THB 40 billion by the end of the year.
“Demand in the residential market in both Bangkok and suburban areas is still strong in the last quarter of this year. This will boost our presales to achieve the target at the end of this year,” he said.
by kevinyeo | Dec 24, 2017 | Bangkok Property Market Updates, Investment Analysis, New Launches & Project Previews
Property agency Nexus Property Marketing forecasts the property market will see growth of more than 10 per cent in the number of project launches next year.
This year Bangkok condominium have been booming, with the most project launches seen in a decade. The Phra Khanong-Suan Luang area remains attractive with the largest number of new projects launched. The Pathumwan—Ratchathewi area has seen the highest increase in prices , by up to 16 per cent.
Nexus points that a future residential trend will move to a “transition” situation, being driven by various factors including investment by foreigners, the exponential growth of the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam), the trend for an ageing society, technology influencing new property development, the company’s managing director Nalinrat Chareonsuphong said.
According to the survey, the top three locations for condominium supply increases are: 1. Phra Khanong—Suan Luang, with 14,400 units or a rise of 23 per cent; 2. Phaya Thai—Ratchadaphisek, with 13,200 units and an increase of 21 per cent; and 3. Thon Buri— Petchakasem, with 8,900 units or a growth of 14 per cent. New supply in these locations accounts for 58 per cent of the total number of new condominiums launched in Bangkok.
by kevinyeo | Dec 24, 2017 | Bangkok Property Market Updates, Investment Analysis, Legal, Tax & Due Diligence
The average price of condominiums could grow at least 8% in 2018, despite the looming land and buildings tax, says property consultant Nexus Property Marketing Co.
Managing director Nalinrat Chareonsuphong said the land and buildings tax, due to come into force in January 2019, is unlikely to harness the increase in land prices in Bangkok, allowing condo prices to keep rising.
“There is unlikely to be forced sales among landowners who are pressured by the land and buildings tax,” she said.
“If the tax is effective, they have options to apply to their assets anyway and will not need to sell the plots.”
As land prices will keep rising, condo prices will also rise next year. This year the average selling prices of new condos in Bangkok rose by 8% to 130,600 baht per square metre from 121,000 baht per sq m last year.
The average increase of condo prices in the past five years was 9% per year.
Pathumwan and Ratchathewi districts saw the highest increase in condo prices, with a rise of 16% to 234,000 baht per sq m on strong demand.
Land costs in these locations were also higher while new condos were limited in supply over the past several years.
For inner-city locations, the average selling price rose by 12% to 210,700 baht per sq m. In Yannawa and Klong San districts, where condo sales were healthy, the average selling price also increased by 12%. In Bangkok outskirts, the increase in price was slight at around 5%.
According to Nexus’ market research, the number of new condos launched in Bangkok this year hit the highest in a decade with a total of 62,700 units from 128 projects.
The new condo supply launched this year was 15% higher than the five-year average, which was some 53,600 units per year.
The total condo supply in the market was 550,000 units.
The highest increases in condo supply were seen in Phra Khanong-Suan Luang area with 14,400 units or a rise of 23%; Phaya Thai-Ratchadaphisek with 13,200 units, an increase of 21%; and Thon Buri-Phetkasem with 8,900 units, or growth of 14%.
The new supply in these three locations accounted for 58% of the total of new condos launched in Bangkok.
The Phra Khanong-Suan Luang area also saw the largest number of new projects launched, while the Pathumwan-Ratchathewi area saw the highest increase in prices with a rise of 16%.
In 2017, new demand for condo sales in the market totalled 57,300 units, which was 14% higher than the average sales over the past five years, or some 50,400 units per year.
The total condo sales rate in the market stood at 90%, while the total sales of condos in the market rose to 496,100 units.
The number of unsold condos in the market is around 53,900 units.
In 2017, the average sales rate of new condos launched in the market was roughly 62%.
Phra Khanong-Suan Luang, Phaya Thai-Ratchadaphisek and Pathumwan-Ratchathewi saw the highest numbers of condos sold.
The Pathumwan-Ratchathewi area saw the highest new condo sales rate at 88%.
In the past five years, the condo market expanded to outer city locations. The zone where condo area growth was the highest was Thon Buri-Phetkasem with a rise of 107%, followed by Tiwanon-Rattanathibet (76%) and Chaeng Watthana-Pak Kret (68%), when compared with 2016.
Ms Nalinrat said the property market next year will see growth of over 10% in the amount of new supply.
“Next year the property market will be in transition, driven by various factors including foreign investment, exponential growth in Cambodia, Laos, Myanmar and Vietnam, the ageing population and technology for new property developments,” she said.
by kevinyeo | Dec 17, 2017 | Bangkok Property Market Updates, Investment Analysis
Thailand’s real estate market will rebound in 2018 as the local economy continues to recover, with condominiums remaining the top pick for consumers attracted to an urban lifestyle, says the inaugural DDproperty Property Market Outlook report.
Housing for senior citizens will grow in popularity as developers compete for this segment of the market amid an aging population in Thailand, the research report said.
The report aims to help homebuyers make informed decisions. It analyses data from the past year to forecast market trends in the next six to 12 months, helping buyers, sellers, renters or lessors to not only understand the market, but to prepare plans and make decisions with greater confidence.
Real estate demand in Bangkok in 2016-2017 was supported by developers launching projects near future mass transit lines and the city’s fringe areas.
However, when the government’s economic stimulus package expired in the second quarter of 2016, demand became sluggish for most of 2017.
“DDproperty expects demand for new releases to start moving in an upward trend as we head into 2018, thanks to rising consuming spending – in-line with the economic recovery, the expansion of mass transit lines, and government infrastructure projects along the Eastern Economic Corridor,” said country manager Kamolpat Swaengkit.
“On the supply side, 2018 may see even more projects from developers compared to 2017, so the real estate market is forecast to show signs of improved health next year.”
by kevinyeo | Dec 4, 2017 | Bangkok Property Market Updates, Investment Analysis
DDproperty, an online real-estate portal, launched the Property Index for Thailand for the third quarter of 2017.
The DDproperty Property Index (for Bangkok prices) reached 199, a 5-percent increase from the second quarter, highlighting the ongoing growth in the market since the start of the year.
The modest growth is further proof that the property market is gradually recovering from the Kingdom’s economic slowdown and weaker purchasing power in the mid- to low-end segments caused by rising household debt, said Kamolpat Swaengkit, country manager for DDproperty, which each month helps more than 3 million Thais in their search for a home.
“We’re cautiously optimistic about the Thai property market and believe there are opportunities for sellers, but particularly for buyers given rising supply levels and the low-interest rate environment which is expected to persist for some time,” Kamolpat said.
The index tracking residential prices increased 13 percent year-on-year during the third quarter, bringing growth over the past two years to a remarkable 53 percent, he added.
Condominiums continue to command the most attention from home-buyers, with the condo price index hitting 219 in the third quarter, continuing an upward trend from the previous three months.
by kevinyeo | Nov 22, 2017 | Bangkok Property Market Updates, Investment Analysis
Thailand’s economy grew faster than economists estimated last quarter and is on track for a strong year in 2018, underpinned by a pick-up in exports and booming tourism.
| HIGHLIGHTS OF THE GDP REPORT |
- Gross domestic product rose 4.3 percent from a year ago, compared with the median estimate of 3.9 percent in a Bloomberg survey of economists
- Compared with the previous three months, GDP rose a seasonally adjusted 1 percent in the third quarter, higher than the 0.7 percent median estimate
|
After years of lagging its neighbors, Thailand’s economy is finally catching up with the economic boom in Southeast Asia, fueled by a global trade recovery and a flood of visitors from China. The end of a yearlong mourning period for King Bhumibol Adulyadej strengthens the outlook for consumer spending into next year, while the government is ramping up spending on infrastructure projects to support growth.
The statistics agency said the economy will probably expand 3.9 percent for the whole of 2017, and 3.6 percent to 4.6 percent next year, supported by export growth of 5 percent.
“Economic growth next year will accelerate from this year,” Porametee Vimolsiri, secretary general of the statistics agency, or National Economic and Social Development Board, told reporters in Bangkok. “We may see 4 percent level, supported by an improving global economy, government investment and a clearer recovery of private investment. We will see improving employment and revenue.”
Prime Minister Prayuth Chan-Ocha has adopted measures to boost growth, including a 1.5 trillion baht (USD 46 billion) infrastructure spending plan, and tax breaks for year-end shopping. Thailand — under military rule since 2014 — is on course for electionsnext year.
“Growth is broadening with exports and tourism still doing the heavy lifting,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “Our 2017 GDP growth forecast of 3.5 percent now looks light and we will be revising it to reflect the endurance of the export recovery.”
Rate Hike?
Thailand’s growth last quarter was supported by a 4.3 percent jump in manufacturing, a 6.7 percent expansion in hotels and restaurants, and an 8.1 percent increase in the transport and storage industries. Private consumption growth remained muted at 3.1 percent compared with 3 percent expansion in the second quarter, while investment rose 1.2 percent.
The response by financial markets to the data was also subdued, with the benchmark stock index rising 0.2 percent as of 12 p.m. in Bangkok on Monday. Julian Wee, a senior market strategist in Singapore at National Australia Bank Ltd., said the GDP data showed “domestic demand might still be quite tepid” and investment showed “little sign of revival.”
Southeast Asian nations are enjoying a growth resurgence with expansion in Vietnam, the Philippines and Malaysia quickening. At the same time, it’s raising worries about inflation and questions about whether central banks in the region will need to tighten monetary policy soon. The Bank of Thailand has held its benchmark rate near a record low since 2015.
Porametee, who is also a member of the central bank’s Monetary Policy Committee, played down any talk of rate hikes yet.
“Fiscal and monetary policies will remain accommodative to ensure macro conditions are stable,” he said. “There is no need to rush on raising interest rates.”
by kevinyeo | Nov 20, 2017 | Bangkok Property Market Updates, Investment Analysis
Housing prices are rising in the Silom-Sathon area due to higher land value and condominium projects.
This is according to results of a real-estate survey released by property and facility management agency Plus Property.
The most recent price for land in the area was found to be THB 1.45 million per square wa, with condominiums commanding prices of THB 200,000-THB 300,000 per square meter.
The area’s location as a business district, surrounded by the offices of leading companies, famous schools, hospitals and government agencies, has attracted both Thai and foreign buyers. They include homeowners and investors, with the rental market showing a 5 percent annual return on investment and average resale prices increasing 7 percent per year over the past five years.
Anukul Ratpitaksanti, Plus Property managing director, said the survey had identified that the Silom-Sathon area had high potential.
Despite possessing limited land for development, the area is experiencing “interesting growth” in condominiums, with a supply of 6,786 units available in the first half of 2017, Anukul said.
At present, the average price of Silom-Sathon condominiums is quite high due to limited land and continual price increases, contributing to rising capital costs of investments for project development, the company said.
New projects located near main roads or mass transit lines feature prices of 200,000-300,000 per square metre, which continue to attract interest. During the past three years, only five new projects were opened in the area, but they boasted average sales of up to 85 percent during their first six-month opening periods.
The survey found that the rental market continues to attract significant interest due to condominiums in Silom-Sathon generating high returns on investment. A condominium unit priced at THB 6.5 million can be rented for THB 30,000 per month, providing an average 5 percent annual return on investment.
The current average rental rates for Silom-Sathon condominiums located near mass transit lines is THB 700-THB 1,000 per square meter. For property purchased for resale, it was found that during the past five years a one-bedroom unit commands a resale price of about THB 210,000 per square meter, while a two-bedroom unit has a resale price of about THB 200,000 per square meter.
The current land price in the area is THB 1.45 million per square wa, with an appraised price of land located on Sathon Road, especially land near roads or mass transit lines, growing an average of 78 percent from 2008 to the forecasted 2019 period. Land on Silom Road has increased 53 percent during the same time range.
“Although the Silom-Sathon area features convenient transportation, including the BTS and MRT, the number of mass transit users is growing every year, with information from BTS Group Holdings indicating that the number of BTS passengers is growing an average of 3-10 percent per year,” Anukul said.
“People working in this area seek real estate to live near their workplaces, in order to avoid heavily used mass transit systems and rush-hour traffic congestion. The forecasted demand for real estate in this area is expected to increase due to buyers’ desire to avoid tiring commutes and travel costs, as well as the proximity and easy access to nearby lifestyle venues, department stores, and world-class restaurants.”
by kevinyeo | Nov 10, 2017 | Bangkok Property Market Updates, Developer Watch, Investment Analysis
Sansiri Plc, one of Thailand’s largest property developers by sales, sees China becoming its biggest foreign revenue source as early as this year, the latest sign that the world’s largest property-buying binge is undimmed by China’s tighter capital controls.
The Bangkok-based developer has seen no cancellations from Chinese buyers since the world’s most-populous nation imposed stricter rules to deter residents from buying overseas property, Head of International Business Cobby Leathers said in an interview. Sales from China are on track to double to USD 106 million this year, and estimated to jump another 32 percent to USD 140 million next year, according to the firm.
For Sansiri, the growth means China is set to overtake Hong Kong as its top foreign market next year, President Srettha Thavisin said. Sansiri is “highly reliant” on foreign buyers and as much as 40 percent of the developer’s sales are from buyers in Singapore, Hong Kong and China, according to RHB Securities.
Tighter capital controls have done little to dent the appetite of Chinese buyers who already helped drive prices higher across the globe. While definitive data are hard to come by, real estate brokers including Knight Frank LLP, Savills Plc and domestic firm Shiju report rising purchases of overseas property this year by Chinese buyers.
Cheaper Properties
Stricter enforcement of quotas to convert yuan for property purchases have spurred Chinese buyers to buy cheaper properties, helping developers in markets where home prices aren’t inflated. Most of Sansiri’s Chinese buyers bought homes priced between 1 million-2 million yuan, or USD 150,000 to USD 300,000, Leathers said.
Those prices are “only a third or half of those in Chinese cities,” he said.
Sansiri is the second-biggest Thai developer by trailing 12-month revenue, according to data compiled by Bloomberg. China will likely contribute 40 percent of overseas revenue overseas next year, eight percentage points more than in the first half of this year, the firm said. Sansiri is adding three more Chinese offices in Shanghai, Guangzhou and Shenzhen to its existing Beijing foothold to expand its local network.
“If the ban hadn’t been in place, we would have gone a lot more aggressive in marketing here,” said Thavisin.
Upcoming Launches By Sansiri
oka Haus Sukhumvit 36
kawa Haus Sukhumvit 77
by kevinyeo | Oct 13, 2017 | Bangkok Property Market Updates, Investment Analysis
Land prices in the central business district (CBD) are expected to continue rising despite the already pricey levels in the area.
The average land prices in the CBD rose 6.4% last year, with the highest price recorded at 1.91 million baht per square wah in 2015.
Surachet Kongcheep, associate director for research at property consultant Colliers International Thailand, said land plots in locations along the Skytrain route from Siam to Asok stations are getting scarcer, driving offering prices to over 2 million baht per sq w.
“No landlords on the main road along the Skytrain in these locations have offered prices lower than 2 million baht per sq w since last year,” he said. “The record high offering price is 2.5 million baht on Phloenchit Road.”
However, there were no sales for over 2 million baht per sq w (excluding plots bought with a special entrance to the road) since a deal in 2015 where the price was 1.91 million baht per sq w.
That was for a plot on Chidlom Road opposite to Central Chidlom bought by SET-listed developer SC Asset Corporation Plc, which launched a luxury condo project there last year with an average sales price of 350,000 baht per sq meter.
“Developers have a ceiling price for buying plots in prime locations,” said Mr Surachet. “As soon as they think a condo project developed on the plot can be sold at a high price, they will buy despite such high land prices.”
Developers continuing to launch high-priced condo projects in these locations include SC Asset, Sansiri and Ananda Development. If they keep buying new plots in these locations, it means their existing supply is taken up, he said.
There has been no movement in these locations since late last year as demand for condos priced higher than 300,000 baht per sq m was limited, said Mr Surachet.
According to property consultant Agency for Real Estate Affairs (AREA), land prices in Greater Bangkok will rise by 4% on average this year, the same as last year. In 2015, prices rose 3.2%, down from 3.5% in 2014 and 4.6% in 2013.
The highest increase last year was near the Sukhumvit-Asok Road areas, up 27% to 1.4 million baht per sq w, followed by locations near The Mall Tha Phra on Ratchadaphisek Road in Thon Buri district, with a 25% uptick to 300,000 baht per sq w.
AREA managing director Chamnong Buakai said the Sukhumvit-Asok location saw the highest increase as available land plots there for property development were scarce.
As of the end of 2016, the highest land prices were still in Siam Square, Chidlom, and Phloenchit areas at 2 million baht per sq w, expected to rise to 2.13 million by the end of this year, a rise of 6.5%.
Appraised land prices at these locations for 2016-19 by the Treasury Department were 900,000 baht per sq w, second only to Silom Road at 1 million baht per sq w.
“Locations on Rama IV Road from the Sathon to Sam Yan intersection will become emerging areas for new development, with at least two large projects expected to be located there,” said Mr Chamnong.
Land prices on Rama IV Road are around 400,000-500,000 baht per sq w. AREA estimated they would rise to 1 million baht per sq w once the Grey Line between Rama III Road to Watcharaphol started construction.
According to SET-listed hotel group Dusit Thani Plc’s report to the Stock Exchange of Thailand, a plot sized 23.5 rai on the corner of Rama IV and Silom roads, where the Dusit Thani Hotel is situated, was leased to Dusit for 30 years at a price of 7.33 billion baht, or 780,000 baht per sq w.
The lowest land price in Greater Bangkok was on Liab Khlong 13 Road KM5 in Lam Luk Ka area at only 2,600 baht per sq w because there was no infrastructure to attract new property development.
