Chappaqua NY Realtor | Mixed market for Thailand condos

The price of luxury property in Thailand has hit record highs, according to the latest report from CBRE, but the performance of the condominium sector has been mixed depending on property type and location.

The highest quality properties in the prime locations are hitting the top prices, thanks to a limited supply of two- and three-bedroom units, CBRE reveals, but “these price rises have not been seen in every recently completed building.”

The prices of one-bedroom condos are more mixed: some projects launched in the last two years have not sold out at all.

“Generally the best performing projects have been those closest to transit stations,” says Aliwassa Pathnadabutr, managing director of CBRE Thailand. “In some areas the one bedroom sector is going to come under pressures from developers’ unsold inventory and shadow inventory from units bought by speculative buyers who want to resell before completion.”

“We expect that developers will become more selective about location focusing on mass transit stations. The challenge for developers will be to acquire land at a price where they can still build condominiums that are within the purchasers’ maximum budgets,” adds Pathnadabutr.

“The choice is either to buy cheaper land away from mass transit stations or to reduce the size of the units. Developers are trying to balance affordability with usability.”

“In the middle and entry-level markets, condominium prices have adjusted upwards, but to a lesser extent than the luxury market. There continues to be new project launches although the absorption rate is slower compared to two years ago where many projects tended to sell out at launch. The top public listed developers dominate this segment of the market,” explains Pathnadabutr.

The total completed supply in down Bangkok reached 93,593 units, an increase of 6.1 per cent from last year, while the total number of units occupied by owners or tenants increased by 73 per cent from the the last quarter of 2011 to the first quarter of this year.

Vacancy rates will rise in older buildings, particularly those which have units available for rent as tenants will prefer to lease units in new buildings. The Pathumwan area has the highest occupancy rate of 92 per cent.

Average resale prices of completed upscale units has grown by 13 per cent from 2011, rising from THB124,895 per square metre in the first three months of last year to THB140,851 per square metre. To get the best prices for condos in Thailand , check out Siam Real Estate.

Total apartment supply in downtown Bangkok edged upwards by 0.1 per cent year-on-year, while occupancy rate dropped from 89.5 per cent at the end of 2011 to 86.6 per cent. This quarterly decrease is in line with expectations that occupancy rates, which were artificially inflated by people seeking temporary residence during the flooding in the last quarter of last year, would fall as short-term contracts expired.