For years Bangkok’s property grapevine has been full of whispers that eventually the market will come to a screeching halt.
In reality the story told is quite the opposite. So far we are yet to see any sign of this rumoured burnout despite what appears to be a continuous oversupply of new condo developments in the city.
Colliers International’s recent assessment of the situation plunged the hopes of those holding on for that window of decline. The business’s research reports show that new condo development value has risen by an overwhelming 21% quarter-on-quarter in 2013. Here are five reasons why the condo market is still on the rise.
Economic Factors
Thailand’s GDP per capita has doubled since the new millennium. This surge in wealth has increased Thai’s spending power, and so competition for purchasing hot property in premiere locations is rife. Purchase offers made have regularly surpassed the value of the property in this market segment.
In the centre of the city demand is high, and so those who have been able to cash in on their pre-millennium purchases are selling up and moving further afield purchasing cheaper properties and taking advantage of their cash surplus. This has caused a similar situation on the outskirts of the city as low to mid-range budgets start to purchase in the suburbs, the price of suburban homes has started to rise due to demand.
Many Foreigners in the Market for Condos
With ASEAN fast approaching marketing and financial firms are seeking the expertise of foreigners. Many of these contractors come from other AEC member countries. Also, foreigners with knowledge of the inner workings of systems such as the EU and NAFTA versions of the ASEAN are in demand.
Better Quality Lifestyle Living
The quality of condos being built right now is a far cry from some of the older developments erected during Bangkok’s boom period. Now many of these older condo blocks are being torn down and replaced with new state of the art fitted living spaces. This has created a double price hike in the property market.
Firstly, with quality comes price, and so new developments with their high interior costs are pushing up the average cost of a condo in the city, while the older condo blocks are slowly disappearing. In the low end spectrum of the market, supply for low cost condos is slowly reducing pushing up the average price paid for these maturing condos.
New Launches Decrease
Although a quick taxi ride through the city may not have suggested it, the number of new developments in Bangkok had fallen by 22% in the first six months of this year compared to 2012. This information was published in a Bangkok Condominium market report. Strange as it may seem supply may not be enough with ASEAN around the corner. An influx of foreigners allowed to work and live in Thailand is expected to send demand through the roof.
BTS and MRT Developments
Any property within a 200 meter radius of one of the newly erected BTS or MRT stations has rocketed. Condo prices do begin to drop in price slightly out this 200 meter zone. Nevertheless, even condos as far as a kilometre off these new public transport systems have still benefited through increased value.
