Developers focus on Asok-Thong Lor belt
The price of land in the area stretching from Asok to Thong Lor has risen at the rate of 19% per year in the past seven years, driving up prices of new condominiums in the belt by 9% per year, says consulting firm Nexus Property Marketing Co.
Nalinrat Chareonsuphong, the managing director of Nexus, said land prices in this sought-after area rose from about 350,000 baht per square wah seven years ago to 1.01 million baht per sq w this year.
“The key reason is limited land supply in the area,” she said. “It is one of the top residential locations in Bangkok that mixes the lifestyle demands of a great number of prospective buyers.”
According to research conducted by Nexus, the biggest increase in land prices in the Asok to Thong Lor area was recorded in upper Soi Thong Lor with a rise of 22% per year during 2011-2017.
It was followed by other key sois off Thong Lor and Sukhumvit Road in the area, which increased 20% each per year during the period.
Lower Sukhumvit Soi 39 to Soi 49 saw a rise of 18% in land prices per year in the period, followed by lower Soi Thong Lor, which recorded growth of 17%.
“Most of the plots acquired were developed as residential projects including condominium and rental residences like serviced apartments or hotels as this area is one of the most stylish locations in Bangkok,” said Mrs Nalinrat.
She estimated land prices in this location will continue to rise with an increase of at least 10% per year expected over the next two years.
From 2012 to the third quarter of this year, property developers have remained confident of demand growth for condominiums in the Asok to Ekamai area, with the number of new units on offer at present totalling 14,332 units in 48 projects.
The growth rate for supply of new condominiums in the past six years in the area was 67% per year.
From the first nine months of 2017, new condominiums accounted for 29% of the total supply or 4,281 units in 17 projects, signalling property developers’ confidence in the location.
Segment-wise, the largest number of condominiums in the Asok to Ekamai area were high-end projects with 7,919 units accounting for 55% of the total 14,332 units sold.
The next most popular segment was luxury, with sales of 4,089 units, while super-luxury had 2,324 units.
The number of condominium units developed by large developers totalled 9,332, which accounted for 65% of the total. Those built by small developers amounted to 5,000 units, accounting for 35%.
This suggests large developers remain confident in demand for luxury condominiums at this location.
In the near future, eight new projects will be launched in the Asok to Ekamai area. Most of these will be located in the Ekamai and Thong Lor area, being developed by large developers including Noble Development, Sansiri, Singha Estate, MQDC and Ananda Development.
From 2012 to the third quarter of this year, condominium sales in the area have totalled 11,218 units, accounting for 75% of the total supply.
The sales rate in the high-end segment was 77%, while the luxury segment was 74% and the super-luxury segment 74%, partially based on the supply in each segment, said Mrs Nalinrat.
Luxury condominium prices have risen consistently from 2012 to the third quarter of 2017, from 158,800 baht per square metre to 222,944 baht per sq m.
The overall increase in the average price has been seen as a positive trend, except for the period from 2013 to 2014 when the developers were more interested in the high-end segment. As a result, prices rose only slightly during that period.
“The Asok to Ekamai area is the key location for luxury property development by large developers. However, limited land and funding have become factors driving developers to build projects with niche features,” Mrs Nalinrat said.
Developers opt for either high-rise high-end projects, low-rise luxury projects or joint ventures with foreign partners for financial and technology purposes.
Meanwhile, condominium selling prices per sq m have been rising in proportion to the cost of land.
However, in 2016-17, launch prices were kept stable as developers shifted focus to low-rise high-end projects.
As competition in the luxury market remains very high with an increasing number of new projects being launched simultaneously, the product quality is better, offering different features depending on each project, which benefits the buyers, Mrs Nalinrat said.