Luxury property developer Raimon Land’s latest survey says
that a resilient Thai economy registered over 10% growth in the first half of
2010, driving sales and investment returns despite earlier political troubles.
An artist’s
render show’s Raimon Land’s new Bangkok condominium project “185 Rajadamri”.
The ninth edition of their publication Condominium Focus
Thailand further provides evidence drawn from historical data since 2006 until
the end of June this year of the benefits the condominium market has enjoyed
with presale figures from key listed developers already totaling THB31 billion
in the first half 2010.
A total of 4,098 new condominium units were completed in
Bangkok’s inner-city areas in the first half of 2010, increasing the total
supply by 7%, with another 9,866 units still in the pipeline, of which 75% have
been taken up so far.
The average price of condominiums sold in Bangkok’s
inner-city during the first half of 2010 was THB108,125/sq.m - while top-end
launches in prime locations are currently selling at prices of THB180,000 and
upwards, such as the St. Regis Residences, Ritz Carlton Residences and the
upcoming 185 Rajadamri condominium development.
Condominium prices in second and third-tier locations have
also risen significantly, closing the gap on average inner-city prices. The
number of re-sales in the secondhand market has increased too, likewise
narrowing the gap from off-plan prices.
The strengthening of Thai baht and the concurrent weakening
of European currencies have also combined to change buyer demographics.
“One of the key findings of our research is that demand from
Thai buyers is stronger than ever with many developers adjusting their
strategies to tap this market. At Raimon Land, foreign demand switched to Asian
nationals while European demand continued to struggle with their own economies
and weak currencies,” said Raimon Land Deputy Vice President for Research and
Development, Simon Derville.
The survey reports the market for condominiums in Pattaya,
which had always relied upon international tourism arrivals (up 13.7% in H1/10),
is now catering far more to domestic residents on weekend trips from Bangkok.
The first half of 2010 also saw a shift in focus towards
Pattaya’s urban areas: 89% of new condominium launches were budget units priced
THB1 million to THB5 million located inland, close to the city centre.
“We expect future launches to tap into a more affordable
market, targeting weekend visitors from Bangkok rather than holiday makers from
Europe. When looking at the nationalities of buyers in Pattaya in particular -
67.4% are now Thais, 9% are Russians while two large prospective markets are
emerging: India and China,” added Derville.
New launches in seaside locations reduced to just 158 units
in the first half of the year, with another 3,659 units still on hold. Just 379
units are expected to be completed in H2/10 - while owners who decided to rent
out their units are achieving rental yields of 5-7%.
Condominium Focus Thailand is a research publication aimed at
providing investors and industry observers with an accurate insight into supply,
completions, off-plan sales and transfers.
The report covers condominium projects launched since 2006 in
Bangkok and Pattaya that have a majority of units priced at over THB2 million.
Raimon Land collects this data by surveying the projects listed in the
publication, on a monthly basis through a variety of sources comprised of site
visits, interviews, press articles, investor research on listed companies and
other research agency reports.
The data catchment area of inner-city Bangkok includes
Sukhumvit, Silom/Sathorn, Central Lumpini, and Riverside locations, whereas in
Pattaya, it includes the areas from Naklua in the north of Pattaya down to Na
Jomtien in the south of Pattaya.
