Foreign investors return to Bangkok’s luxury residential market
Condominium sales in Bangkok have been slower amid an economic slowdown in the country but prices of luxury projects in prime locations continue to rise as demand from cash-rich overseas investors remains high and foreign investors return to the market after a bomb attack killed 20 tourists last August.
James Pitchon, head of research at property consultant CBRE Thailand, said the overall condominium sector in Bangkok, however, has been slower, with fewer launches and slackening sales of new projects. “But prices have generally remained stable and increased for the best-quality, best-located projects,” he said.
Big-ticket developments under construction include The Ritz-Carlton Residences Bangkok and Marque Sukhumvit next to the EmQuartier shopping centre, as well as the recently launched The Residences at Mandarin Oriental and Bangkok on the Chao Phraya River, he said.
Surachet Kongcheep, associate director of research at property consultancy Colliers International, said foreign buyers from China and Hong Kong are the main targets for developers focused on the luxury residential market.
He said some condominium projects in Bangkok along Sukhumvit Road have sold out their foreign quota – 49 per cent of the flats – to buyers from China, Hong Kong and Japan within days.
Most listed developers pricing their property at around 200,000 baht per square metre (HK$44,522) normally take their projects to Hong Kong, Singapore and China, he said.
Among them, Country Group Development plans to kick off the third round of sales of its Four Seasons Private Residences Bangkok in Hong Kong in the second half of this year.
“Hong Kong is an important market for us. We hope to come to the city at least once a year,” said chief executive Ben Taechaubol.
Nearly 40 per cent of the 132 units in the super deluxe residential development has been sold to foreign buyers since last year.
“Those from Hong Kong account for a big portion (of the buyers),” he said. The US$1 billion integrated project comprises 355 apartments in a 73-storey residential tower, 312- room Four Seasons Hotel and a 101-room Capella Hotel due to be completed in the forth quarter of 2018.
The average price of a 1,008 square metre penthouse would be 373 million baht, while two-bedroom flats with sizes ranging from 115 to 138 sq metre would cost 35 million baht.
“It should be the most expensive penthouse along the Chao Phraya river,” he said. The development still has four penthouse available for sale after three have been sold. The going price for the project is 410,000 baht per square metre.
Bunthoon Damrongrak, head of residential agency at JLL Thailand, said demand from foreign buyers in the Bangkok condominium market dried up for years after the global financial crisis but has come back in recent years, particularly from Asian buyers.
“It takes buyers longer to make a purchase decision due to rising prices. In addition, many of them have become more cautious about purchasing condominiums to put up for rent, realising competition in the leasing market has got tougher,” he said.
Demand from Hong Kong buyers is normally concentrated in the luxury segment priced 200,000 baht per square metre upwards, while Chinese buyers are more interested in a lower price segment, he said.
The bomb blast at the Erawan shrine in Bangkok last August had no significant impact on the Bangkok property markets, particularly the residential sector, according to him.
“Hospitality and retail sectors were the only two property markets that felt the impact. However, the impact lasted only a short period. International arrivals in Bangkok in 2015 actually grew to 19.3 million from 15.5 million in 2014.”