Property Market in Central Bangkok
Likely To Be Vigorous in H2/2019
NEXUS discloses property developers plan to launch a number of new projects after the country’s election and important events have completed. Most projects from listed developers have been planned since last year, while medium-sized developers will launch their new projects to expand the business continuously. In the first half of this year, the market was relatively decelerated due to the LTV policy and lower demand from foreigners. Meanwhile, supply tends to increase in the second half and targets more in the niche market. However, developers remain waiting for the government’s policy to boost the demand in the property market.
Mrs. Nalinrat Chareonsuphong, Managing Director of Nexus Property Marketing Company Limited (NEXUS), says that there were the new supply of 12,300 units from 30 new condominium projects launched in the second quarter. Many of them are the luxury and super luxury projects in super prime locations particularly in Sathorn, Witthayu (Wireless) and Langsuan. These projects are not only compete on the rare locations, but also create the unique selling points. In the first half of 2019, there were 23,600 units of new condominium launched in Bangkok market which is almost equal to new supply during first half of 2018.
NEXUS cites that more of new projects will be introduced in the second half of this year. Listed property developers announced 14,000 units from 44 projects in the pipeline. In addition, another 6,000 units from unlisted property developers are planed therefore more than 20,000 units from 52 projects are set to launch by the end of this year. More than half of total projects will take place in central of Bangkok especially in Samyan, Phayathai and Ratchathewi. Other projects will be located in Sukhumvit, Thonglor and Langsuan. As these locations are prime and rare, the price of new projects will surge not less than 10 percent from the average price of the city-center condominiums launched last year. It is obvious that they target the high-end customers who look for premium products only. The advantge of capturing this market is that as long as the product can fulfill the customers’ requirement, the price is not much the factor for their decision making. However, this high-end market is not large hence the product must be carefully initiated. She added that another interesting location is the riverside locations along the nearly commenced MRT Blue Line and the area along Gold Line as it is being built in a fast speed.
It is important for developers to create new concepts and design facilities to satisfy the lifestyle of their customers. Some projects promote the river view, high ceiling, ample parking lots and co-working spaces. Meanwhile, the condominium market for elderly has gained more interest. In the past, developers rarely focused on this market although this group of people have the real purchasing power, buy for living and understand what they need in the long term. Another market is condominium for animal lovers, who concern the importance to the quality of life of their animals as much as the owners’.
Lastly, NEXUS observed that the government’s policy of deducting transfer fee and land mortgage fee for National Housing Authority’s projects to 0.01 percent for the houses worth less than 1 million baht can really help buyers broadly. However, it did not spur the property market as much as expected. Despite having a lot of units, total sale revenue remains low for this group of product. The government should consider using the same measure with the houses that cost up to 5 million baht to make the stronger impact and enable more people to benefit from it. In conclusion, new government should launch the economic policies as fast as they can so that the property market can enjoy the incentives from the policies and the demand will rise too.
