Homing in on the Thai capital
Jason Gagliardi in Bangkok
Amid soaring property prices, cashed-up Hongkongers are flocking to Bangkok to snap up luxury condominiums for a third or even less of what they would pay for a similar flat at home.
Bangkok has a healthy property market, commanding competitive rents, especially for flats that are a convenient distance to the Skytrain or subway systems and in the expatriate-friendly areas of Sukhumvit and Sathorn.
Hongkongers have been investing in Thai property for years but, with several spectacular new projects coming onto the market, their bulging pockets have come into the spotlight. When Thai property developer Pace Development launched MahaNakhon to Hong Kong buyers, more than 350 million baht (HK$90 million) worth of flats were sold in three days. The MahaNakhon project is the most cutting-edge and high-profile on the market in Bangkok: it resembles a cubist's fantasy, something Pablo Picasso might have concocted if he had had a stab at architecture. For some, though, the gaping gouge out of the tower's centre brings the 9/11 attacks uncomfortably to mind.
CB Richard Ellis' executive director for investment and project marketing, Rebecca Shum, believes Hong Kong property prices have peaked and canny investors should be investing in markets with more potential for future growth, such as Bangkok.
'Bangkok is still a top lifestyle destination in the eyes of Hong Kong investors,' she says. 'Their interest in luxury Thai property is driven by a lift in optimism about the overall political and economic environment in Thailand.'
The new government's promises to stimulate economic growth and give stalled public transport projects a shot in the arm have helped bring confidence back just 18 months after the red-shirt riots left parts of the city in smouldering ruins. Bangkok also continues to develop apace as an international, cosmopolitan city, with a great selection of restaurants and clubs.
A plethora of young, well-funded creative types have foregone the family business and instead opened the bar or restaurant of their dreams, so the city bristles with fresh places to check out. There is also a growing arts scene. Traffic is still one of the biggest drawbacks to living in Bangkok, along with the ever-present undercurrent of political instability, but its worst woes can be alleviated by choosing a place near one of the metro systems.
Sorapoj Techakraisri, chief executive of Pace Development, said at a road show at the Ritz-Carlton Hotel in Hong Kong that requests from Hong Kong investors had jumped sharply since the July election. During the road show, small to medium-sized units were preferred by those looking to buy and rent out, while those in search of a second home or even thinking of moving to Bangkok were after the bigger units.
But with another political flare-up a possibility, particularly if exiled former prime minister Thaksin Shinawatra decides upon a homecoming, it might be timely to remind Hongkongers that one old adage still applies: buyer beware.